Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

Oral Answers to Questions — TRADE AND COMMERCE.

ARGENTINA (COMMERCIAL AGREEMENT).

Mr. ALBERY: 1.
asked the Secretary of State for Foreign Affairs whether he can state what the present position is as regards the D'Abernon trade agreement with the Argentine Republic?

The SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Arthur Henderson): The position is that this agreement is still awaiting legislative approval in Argentina.

Mr. ALBERY: Have the representatives of the present Argentine Government not declared publicly their intention to denounce it?

PORTUGUESE PORTS (FLAG DISCR IMINATION).

Sir ASSHETON POWNALL: 2.
asked the Secretary of State for Foreign Affairs if he has received a reply from the Portuguese Government on the question of the discrimination against British shipping?

Mr. A. HENDERSON: I regret that repeated representations to the Portuguese Government on the subject have, as yet, produced no official reply. On the 7th of August the Director-General of the Ministry of Foreign Affairs at Lisbon explained verbally to His Majesty's Ambassador that the question was in the hands of a technical committee. Since that date Sir Francis Lindley, in the hope of expediting the reply of the Portuguese Government, has discussed the matter informally with the Minister of Foreign Affairs, who stated that the technical committee had not yet reported. His Majesty's Ambassador
is fully alive to the importance of this question; and I am convinced that everything possible is being done to induce the Portuguese Government to modify their present attitude.

Sir A. POWNALL: Would the right hon. Gentleman take into consideration the possibility of denouncing our treaty of 1914 if things do not change?

Mr. HENDERSON: I am afraid I cannot commit myself to such a course as that.

Oral Answers to Questions — CHINA.

TARIFF AND EXTRA-TERRITORIALITY.

Mr. DAY: 3.
asked the Secretary of State for Foreign Affairs whether His Majesty's Government intend opening up any fresh negotiations with the Chinese authorities for the revision of the existing tariff or other treaties and can he give the House particulars?

Mr. A. HENDERSON: No negotiations regarding the tariff are proceeding, or are in contemplation. The only subject on which negotiations are now taking place is that of extra-territoriality. His Majesty's Minister at Peking made certain proposals to the Chinese Minister for Foreign Affairs on the 11th of September, but no reply has yet been received.

Mr. DAY: Can my right hon. Friend say whether anything is being done to facilitate getting a reply from the Chinese Government?

Mr. HENDERSON: On the question of extra-territoriality negotiations are going On.

CONSULTATIONS.

Commander BELLAIRS: 9.
asked the Secretary of State for Foreign Affairs whether any suggestions for joint military action have been made by the British Government since they took office to the American and for Japanese Governments in regard to the disorders in China?

Mr. A. HENDERSON: No suggestions for joint military action have been made, but His Majesty's Government have on two occasions during the past year consulted with the United States and Japanese Governments, and on one of these occasions with the French and Italian Governments also, regarding the protection of their respective nationals in China.

Oral Answers to Questions — RUSSIA.

RELIGIOUS SITUATION.

Sir KINGSLEY WOOD: 4.
asked the Secretary of State for Foreign Affairs whether he has received any recent report of any relaxation in the law in Soviet Russia in relation to religious teaching?

Mr. A. HENDERSON: No, Sir. The position, so far as I am aware, remains the same as that described in my reply of the 2nd July last.

Sir K. WOOD: Can the right hon. Gentleman say whether that reply also refers to prohibition against teaching the Christian religion to young persons in Russia? Is that still in force, so far as he is aware?

Mr. HENDERSON: I think that that is the purport of the reply I have given. The position is the same.

PROPAGANDA.

Sir K. WOOD: 6.
asked the Secretary of State for Foreign Affairs whether, as a result of the inquiries of the special committee, he has discussed with the Soviet Ambassador the question of the variation in the terms of the treaty with Soviet Russia, particularly as regards propaganda.; and if he will make a statement as to the position and intentions of the Government in relation to this aspect of the treaty?

Mr. A. HENDERSON: The answer to the first part of the question is in the negative. As regards the second part, I do not at present contemplate entering upon negotiations for a modification of the terms of the notes exchanged in December, 1929.

Sir K. WOOD: But surely the right hon. Gentleman is not going to leave matters in the very serious condition in which they are? Surely he is going to take up with the Soviet Ambassador the important question of this very grave difference of opinion?

Mr. HENDERSON: I have already reported to the House the position.

Sir K. WOOD: But I ask the right hon. Gentleman what he is going to do?

Mr. HENDERSON: I am going to follow the example of my predecessors.

Commander BELLAIRS: When the right hon. Gentleman is carrying on negotiations does he really know who constitute the Government of Russia?

Commander BELLAIRS: 7.
asked the Secretary of State for Foreign Affairs whether he is aware that a despatch from the Foreign Office in 1923 complained of the Soviet Government in September, 1922, equipping and despatching to India and other Eastern countries 62 Oriental students trained in propaganda schools under the Third International; and whether he has ascertained from our Ambassador if this practice has come to an end?

Mr. HENDERSON: The answer to the first part of the question is in the affirmative. With regard to the second part, I have made inquiries, but have been unable to obtain any definite information.

Sir WILLIAM DAVISON: 11.
asked the Secretary of State for Foreign Affairs on what date he first ascertained that the Russian Soviet Government repudiated the interpretation of the pledge as to propaganda given by the Soviet Ambassador on assuming office, as explained to the House of Commons by the Foreign Secretary when asking the House to approve the resumption of diplomatic relations with Russia?

Mr. HENDERSON: I would refer the hon. Member to my speech in this House on the 5th of November last year, and to my answers to a very large number of questions last Session regarding propaganda, and he will nowhere find any statement by me to the effect that the Soviet Government accepted the interpretation which His Majesty's Government placed upon the pledge, namely, that it covers propaganda by the Third International. No question of repudiation, therefore, arises. I have, however, repeatedly made it plain that this is the interpretation which His Majesty's Government place upon it. I would, moreover, repeat the statement which I have already made on more than one occasion, that His Majesty's Government must be the judges, in the first instance, of the importance of any incident which may arise, and of the appropriate action, if any, to be taken.

Sir W. DAVISON: Is it not a fact that the House approved of the resumption of diplomatic relations with Russia on the understanding that the assurance given by the Ambassador covered the Third International? When may the House have an opportunity of discussing the changed position

Mr. HENDERSON: With regard to the first part of the supplementary question, that might be the opinion of the minority, but not of the large majority.

DARDANELLES (PASSING OF WARSHIPS).

Commander BELLAIRS: 8.
asked the Secretary of State for Foreign Affairs what was the nature of the communication from the Secretary-General of the League of Nations to the Governments of the Powers in regard to the passage of a Soviet Russian cruiser and two destroyers through the Dardanelles in violation of agreements; and what action is to be taken?

Mr. A. HENDERSON: On the 9th of October, 1930, the Secretary-General of the League of Nations communicated to the members of the League and the Governments of the United States of America, Turkey and the Union of Soviet Socialist Republics the text of a telegram from the President of the Straits Commission intimating that a cruiser and two destroyers of the Russian Black Sea fleet had entered the Mediterranean. As regards the second part of the question, no action is called for.

Commander BELLAIRS: Does not this constitute a breach of treaty arrangements, and has that treaty became a scrap of paper?

Mr. HENDERSON: No, I think not.

Oral Answers to Questions — EGYPT.

Sir K. WOOD: 5.
asked the Secretary of State for Foreign Affairs whether he still proposes to negotiate with the Egyptian Government on the basis of the draft treaty

Mr. A. HENDERSON: The position of His Majesty's Government remains as stated last Session. When an Egyptian Government commanding a majority in a freely elected Egyptian Parliament expresses a desire to resume the negotia-
tions suspended last spring, His Majesty's Government will be prepared to do so on the basis of their treaty proposals.

Sir K. WOOD: Has the right hon. Gentleman received any suggestions from those in authority now in Egypt with regard to proceedings in this matter?

Mr. HENDERSON: No, Sir.

Lieut.-Commander KENWORTHY: When my right hon. Friend uses the term "freely elected Parliament," does that apply to the new so-called constitution in Egypt?

Mr. HENDERSON: I think the term "freely elected Parliament" is easily understood by anyone.

Lieut.-Commander KENWORTHY: 10.
asked the 'Secretary of State for Foreign Affairs whether he can make any statement on the developments of the Egyptian situation since the end of fast Session as affecting British interests?

Mr. HENDERSON: The recent developments in Egypt, to which I referred in my reply to my hon. Friend the Member for Northampton (Mr. Malone), on the 3rd of November, are a domestic issue, and have not affected British interests in such a manner as to involve the responsibilities of His Majesty's Government under the 1922 Declaration.

Lieut.-Commander KENWORTHY: Has my right hon. Friend found it possible to make it clear that we are in no way a consenting party to the alteration of the constitution in Egypt?

Mr. HENDERSON: The hon. Member had better give me notice of that question.

Major McKENZIE WOOD: Has the right hon. Gentleman not made some representations to Egypt with regard to the alteration of this law?

Mr. HENDERSON: I must have notice of that question.

Oral Answers to Questions — PALESTINE.

Mr. L'ESTRANGE MALONE: 13.
asked the Secretary of State for Foreign Affairs whether he will state the nature of the representations which have been received from different parts of the world with regard to the recent British statement of policy regarding Palestine?

The UNDER-SECRETARY of STATE for DOMINION AFFAIRS (Mr. Lunn): I have been asked to reply to this question for the Under-Secretary of State for the Colonies. A number of representations have been received from various parts of the world, but I cannot give an adequate summary of their nature within the limits of an oral reply.

Mr. MALONE: In view of these misunderstandings coming from different parts of the world, will the Government take an early opportunity of issuing a statement to allay these misunderstandings?

Mr. LUNN: I will convey that suggestion to my Noble Friend.

Mr. BRACKEN: 49.
asked the Under-Secretary of State for the Colonies whether he can state the grounds of the Government's refusal to accept Dr. Weizmann's proposal for a round-table conference to discuss the affairs of Palestine?

Mr. LUNN: The question of a. roundtable conference was considered by the Government more than once; but since the disturbances of last year the conditions have not been such as to make the proposal practicable.

Mr. BRACKEN: Is that not all the more reason for holding a round-table conference?

Mr. LUNN: That is very much the same question as I have answered; there is no possibility of a satisfactory settlement in that way, and that is the reason why there is not a round-table conference.

Mr. BROCKWAY: In view of the serious differences of opinion on both sides, is there any hope of a solution by any other method than a round-table conference?

Oral Answers to Questions — LEAGUE OF NATIONS (SLAVERY).

Mr. GRAHAM WHITE: 14.
asked the Secretary of State for Foreign Affairs if it is the intention of the Government to place the question of the appointment of a permanent committee on slavery on the agenda for the 12th Assembly of the League of Nations?

Mr. A. HENDERSON: At the recent Assembly of the League of Nations His Majesty's Government proposed the setting up of a permanent slavery commission as an organ of the League of Nations. This proposal was not accepted, but His Majesty's Government are still of the opinion that it would be desirable. It is, however, too soon to make any announcement regarding the policy to be adopted by His Majesty's Government towards this question at the 12th Assembly of the League of Nations.

Mr. WHITE: May I assume from that answer that the whole influence of the Government will be in that direction at the right time?

Oral Answers to Questions — GOVERNMENT. DEPARTMENTS (TRADE UNIONS, RECOGNITION).

Mr. HORE-BELISHAM: 15.
asked the First Lord of the Admiralty whether he has received a copy of a resolution passed at a joint meeting of representatives of the National Union of Ship Joiners, Furnishers, and Allied Trades and the Government Workers industrial Union, urging that a joint committee be formed to press for immediate recognition of these two trade unions for representation on any existing bodies recognised for negotiating purposes by the Admiralty, War Office, or other Government Departments; and if he intends to take any action to facilitate their aspirations?

The PARLIAMENTARY SECRETARY to the ADMIRALTY (Mr. Ammon): The reply to the first part of the question is in the affirmative. As regards the second part the Government Workers Industrial Union is on the same footing in this respect as the National Union of Ship Joiners, Furnishers and Allied Trades and I must refer the hon. Member to the answer given on 30th July (OFFICIAL REPORT, columns 466–7).

Sir K. WOOD: I suppose that the hon. Gentleman cannot say whether the fact that the Government Workers' Industrial Union refuses to subscribe to the funds of the Socialist party has anything to do with the matter?

Mr. HORE-BELISHA: Will the hon. Gentleman say whether any reason operates, and, if so, what is that reason,
why the first of these unions should not be represented, since practically everybody engaged in that trade belongs to that union?

Mr. AMMON: An answer was given yesterday from another Department to a similar question. Unions which are affiliated to the Trade Union Congress and are national, are considered, and that is the case with the Whitley Council.

Mr. HORE-BELISHA: Has the Admiralty taken into account that, in the present state of the law, the Trade Unions and Trade Disputes Act prevents unions of Government employés being affiliated with an outside body?

Mr. AMMON: The hon. Member is entirely wrong. It does not prevent anything of the sort; it prevents them taking part in political action.

Mr. KELLY: Is it the fact that all employés of the Admiralty are represented by those who now conduct the negotiations?

Mr. AMMON: Yes. That is so.

Oral Answers to Questions — ROYAL NAVY.

PROMOTION.

Mr. THOMAS LEWIS: 16.
asked the First Lord of the Admiralty if he will give the details of the several fluctuations, up and down, of the zone for promotion to commander in the last five years and the reasons for them; and whether he will reconsider the question of the lower limit for the promotion to commander, seeing that the limit is now three years and, as the seniority of lieutenant-commanders (ex-mates) on promotion is also approximately three years, they are only able to get one half-yearly recommendation forwarded after entering the zone, whereas, when the zone was two years, up to June, 1929, they could get three recommendations prior to promotion?

The FIRST LORD of the ADMIRALTY (Mr. A. V. Alexander): Up to June, 1925, the zone of promotion was 3–6i years. The Admiralty then considered it necessary to reduce the limits in order to allow of officers being promoted at a younger age. The limits were therefore reduced in three stages until they stood in December, 1926 at 2–6 years. In 1929 the
Admiralty decided to raise the age again owing to the very large number of officers who were then coming into the zone who had received early promotion to lieutenant during the War. The limits were therefore raised to 2½—6½ years in December, 1929, and to 3–7 years in June, 1930. I am unable to understand the purport of the last part of the question. The zone of promotion has not been reduced in extent and officers are eligible for promotion throughout the period they remain within the zone. As my hon. Friend is aware, the whole question of the promotion of mates is being examined by a committee.

Mr. LEWIS: 17.
asked the First Lord of the Admiralty the average age of the lieutenant-commanders (ex-cadets) promoted to commanders during the last five years; and the number and ages of the lieutenant-commanders (ex-mates) in the zone for promotion to commander on 31st December next?

Mr. ALEXANDER: The average age of lieutenant-commanders (ex-cadet) on promotion to commander during the last live years was 35 years 4 months. The mean age of lieutenant-commanders (ex-cadet) who are in the zone for promotion is rather higher, say, just over 36. Twenty-five lieutenant-commanders (ex-mate) will be in the promotion zone on the 31st December next. Their ages on that date range from 41 years 11 months to 36 years 5 months, the average being 40 years 3½ months.

WAGES (GIRLS, PORTSMOUTH DOCKYARD).

Mr. W. J. BROWN: 18.
asked the First Lord of the Admiralty whether he is aware that girls have been appointed in Portsmouth Dockyard on machine operations at an inclusive rate of 12s. 2d. per week; and whether he will take steps to prevent the employment of girls at these rates of pay?

Mr. AMMON: I would refer my hon. Friend to the reply given him by the Financial Secretary to the Treasury yesterday (OFFICIAL REPORT, column 649).

Mr. BROWN: Is the right. hon. Gentleman aware that in my question yesterday I asked whether steps would be taken to put a stop to this kind of sweating in a Government establishment, and that I got no answer from the Financial Secretary to the Treasury? In those circum-
stances, yesterday's reply does not answer to-day's question, and will the hon. Gentleman now answer it?

Mr. AMMON: It appears to me that this is a case that might well be brought to the attention of the Civil Service Commission.

Mr. BROWN: In those circumstances, may I ask whether the hon. Gentleman will make it the business of his Department to make the strongest possible representations to the Treasury against a continuance of this kind of wage rate?

Mr. AMMON: I suggest that it would he the duty of the hon. Member to make representations to the Royal Commission on behalf of those for whom he speaks.

Mr. BROWN: As the head of a Department has a clear right to make representations to the Treasury, I should like to know if that right will be exercised in this case?

Mr. HORE-BELISHA: Will the hon. Gentleman say whether these girls are recognised; and, if not, by what union their case is to be presented to the Whitley Council?

Mr. AMMON: On that point, I would refer the hon. Member to the hon. Member who put the original question.

OFFICERS' PENSIONS.

Mr. LEES: asked the First Lord of the Admiralty what has been the annual amount of money paid as pensions to retired naval officers during the years 1925, 1926, 1927, 1928, and 1929?

Mr. AMMON: I will, with my lion. Friend's permission, circulate the figures in the OFFICIAL REPORT.

Mr. LEES: Why cannot the hon. Gentleman read to the House such a brief reply?

Mr. AMMON: I have no objection to doing so, but there is a long table of figures, and I am trying to save the time of the House.

Mr. LEES: May I request the hon. Gentleman to read the reply?

Mr. AMMON: the following is the reply?
The amounts paid to officers and warrant officers, etc., of the Royal Navy
and Royal Marines, in respect of retired pay for the years in question are:

£
s.
d.


1925
…
…
2,297,085
15
1


1926
…
…
2,321,412
19
7


1927
…
…
2,396,713
0
1


1928
…
…
2,422,648
18
11


1929
…
…
2,474,542
18
0

Major DAVIES: In regard to the second figure given, may we know if the hon. Gentleman said 19s. 7d. or 17s. 9d.?

Mr. LEES: It is over £2,000,000 in any case—with all the unemployed.

MARRIAGE ALLOWANCE.

Mr. DAY: 20.
asked the First Lord of the Admiralty the date of the last occasion on which the marriage allowance payable to married ratings was reviewed; and whether he is prepared to recommend any further alteration?

Mr. ALEXANDER: The marriage allowance system is constantly under review. The last alteration was the extension of payment in October, 1929, to statutorily adopted children. I am not aware of any alteration that ought to be made at the present time.

Mr. DAY: Will the right hon. Gentleman answer the question as to when the allowance was last reviewed and whether he himself will give the matter consideration?

Mr. ALEXANDER: I have said that it was last reviewed in 1929.

Mr. HORE-BELISHA: Did not the Financial Secretary inform the House that a committee had been appointed to inquire into this matter again; and have I not, repeatedly, asked when that committee was going to report and been told that it had not yet completed its inquiries?

Mr. ALEXANDER: I am not quite sure whether the hon. Member has read the question or not. It refers to married ratings.

DOCKYARDS (ADMIRAL SUPERINTENDENTS).

Mr. MARKHAM: 22.
asked the First Lord of the Admiralty whether the admiral superintendents of the Portsmouth and Devonport Dockyards have recently retired; if so, what pension has been accorded to them; and whether either of them are being retained in their old posts as civilians?

Mr. ALEXANDER: The reply to the first part of the question is that within the last thirteen months both of these officers, having reached the rank of vice-admiral without having flown their flags at sea, have been retired under the regulations. They have been retained in their posts in accordance with the policy of the Board, as in the interests of economy and efficiency it is undesirable that there should be too frequent changes in these appointments. Under the regulations governing the employment of retired officers they do not receive a pension, but the full pay of their rank, plus 15 per cent. as a set off to the fact that they do not count the time while so employed as pensionable service.

OFFICERS (ADMINISTRATIVE EMPLOYMENT).

Mr. MARKHAM: 23.
asked the First Lord of the Admiralty what are the numbers of naval officers of all grades who would normally be on half pay who are now in various administrative positions at the Admiralty and at naval centres?

Mr. AMMON: I would refer my hon. Friend to the reply given to the hon. Member for Southampton (Mr. T. Lewis) on 2nd July (OFFICIAL REPORT, columns 1941–2).

CHATHAM DOCKYARD (ENGINEER MANAGER).

Mr. MARKHAM: 24.
asked the First Lord of the Admiralty whether the engineer manager at Chatham Dockyard is shortly to retire; if so, what pension will be accorded him; and is he to be retained in his old post as a civilian?

Mr. ALEXANDER: It is not anticipated that the engineer manager at Chatham Dockyard will be placed on the retired list in the near future; the other points raised in my hon. Friend's question do not therefore arise.

HIS MAJESTY'S SHIP "REVENGE" (DISCIPLINE).

Mr. MOSES: 25.
asked the First Lord of the Admiralty whether he is aware that a serious state of discontent recently existed on board His Majesty's Ship "Revenge," to the extent that a number of the men made an insubordinate demonstration on shore against their captain who had inflicted punishments upon them; and what steps he is taking to deal with the situation?

Mr. ALEXANDER: I apologise to the House for the length of the answer, but this a rather important matter.
The statements to which my hon. Friend presumably refers proved on investigation to be wholly erroneous. I am satisfied that the state of discipline on board His Majesty's Ship "Revenge" is quite satisfactory and that the allegations against the Commanding Officer, Captain J. A- G. Troup, were unfounded. It is not true that he inflicted any unfair punishments, or that he was the subject of an improper demonstration on shore. I understand that the ship's company have been indignant at the wholly unjustified reflections which these statements have brought upon them.
It is to be regretted that certain newspapers did not print an official Admiralty announcement denying the allegations, but on the contrary, with the announcement in their possession at the time, published the unfounded statements.
Such a publication reflecting on the discipline of the Fleet is much to be deprecated. I would add that such rumours, when brought to the notice of the Admiralty. are always investigated immediately. The authentic information obtained is invariably communicated to the Press, and I hope that in future all newspapers will treat such information as fairly as the great majority of the Press did on this occasion.

Mr. MOSES: What steps are being taken to deal with the "Daily Mail" and the "Daily Express," the papers that were responsible for these allegations?

Mr. ALEXANDER: I hope that the publicity given in this House to the question and answer to-day will be sufficient.

Major COLFOX: Can the hon. Gentleman give us a list of the papers which published this untrue information?

Captain CROOKSHANK: On a point of Order. Is the hon. Member who put the question entitled to put it in that form, in view of the categorical denial of the First Lord of the Admiralty of the allegations made?

Mr. MOSES: On the point of Order. The explanation is that the question was
based upon reports which I had read. 1 put in the question which, in accord with the advice of the Clerks at the Table, was placed on the Order Paper in ' the form in which it is to be found there.

Mr. SPEAKER: If there is any fault to be found with the form of the question, I must bear the blame.

RUSSIAN TIMBER.

Lieut.-Colonel Sir FREDERICK HALL: 26.
asked the First Lord of the Admiralty what is the nature of the labour conditions which are embodied in any contracts which have been entered into for the purchase of Soviet timber for the use of the Navy?

Mr. AMMON: The only timber of Russian origin purchased by my Department consists of certain deals from Archangel. These are purchased from importers in Great Britain, and the contracts contain the usual fair wages clauses.

BRITISH AND UNITED STATES WARSHIPS (FLYING-OFF FACILITIES).

Major ROSS: 27.
asked the First Lord of the Admiralty how many vessels of the British and United States Navies, other than aircraft carriers, are capable of flying off aircraft and are at present fitted with suitable contrivances for this purpose?

Mr. ALEXANDER: Twenty-one British ships are equipped with flying-off facilities. Of these, five are equipped with catapults and 16 with flying-off platforms for light aircraft. The latter are regarded as obsolescent and steps are being taken to increase the number of ships fitted with catapults. Thirty-three United States warships are fitted with catapults suitable for launching aircraft, namely, 18 battleships, three of which will be scrapped under the London Treaty, and 15 cruisers.

Major ROSS: Is the right hon. Gentleman making every effort to bring the British Navy up to date as regards modern requirements for flying-off aircraft?

Mr. ALEXANDER: I have said that we are trying to replace obsolescent flying-off decks on 16 ships by catapult
arrangements, which might have been done long ago under the last Government.

Major ROSS: Whether it be the right hon. Gentleman's fault or anybody else's, is he aware that we shall be rather behind the standard of other nations?

Mr. ALEXANDER: I think the hon. and gallant Gentleman must lay that charge to his own colleagues.

SUBMARINE SERVICE (EAR TROUBLE).

Sir BERTRAM FALLE: 28.
asked the First Lord of the Admiralty the number of ratings serving in the submarine service who were invalided during the year 1929 with ear trouble?

Mr. AMMON: The answer is "three."

Sir B. FALLE: Can the hon. Gentleman say how many of those received pensions?

Mr. AMMON: Not without notice.

MATE SCHEME.

Sir B. FALLE: 29.
asked the First Lord of the Admiralty whether the committee to inquire into the promotion of ratings through mate rank will consider the advisability of extending the mate scheme to ratings of the accountant and other branches?

Mr. ALEXANDER: This as well as all other aspects of the mate scheme will be reviewed in connection with the report of the committee.

STONECUTTER ISLAND (COLONIAL ALLOWANCES).

Sir B. FALLE: 30.
asked the First Lord of the Admiralty whether, since Naval officers stationed at the Royal Naval wireless station arid Royal Naval rifle range on Stonecutter Island are paid Colonial allowance in addition to other allowances, whereas Naval ratings are not paid Colonial allowance, and, in view of the fact that living conditions are identical for officers and men, he will authorise the payment of Colonial allowance to Naval ratings borne for the wireless station and rifle range on Stonecutter Island, and to the ratings at the Aden W/T station where the conditions are similar?

Mr. AMMON: Colonial allowance is only paid to Naval personnel serving
ashore abroad in places where the cost of living and local conditions necessitate greater expense than is met by service issues in kind or the ordinary compensatory allowances. No representations have been received that the circumstances at Stonecutter Island are such as to require the payment of any additional allowance to Naval personnel.

Sir B. FALLE: Can the hon. Gentleman tell me why in that case extra is given to the officers and not to the men?

Mr. AMMON: Not without notice.

RECRUITMENT AND PROMOTION.

Commander SOUTHBY: 32.
asked the First Lord of the Admiralty if, in view of the recently published statement regarding the setting up of a committee to inquire into the question of candidates for officer ranks of the Royal Navy, he will state the terms of reference which are to guide the committee; and whether they include any suggestion of the abolition of the Royal Naval College at Dartmouth?

Mr. ALEXANDER: I would refer the hon. and gallant Member to my reply of the 30th October (OFFICIAL REPORT, columns 216–218) to the hon. and gallant Member for Central Portsmouth (Captain W. G. Hall).

Commander SOUTHBY: Can the right hon. Gentleman say that before any change is made in the present system of the entry of officers into the Service, this House will have an opportunity of debating the question?

Mr. ALEXANDER: I cannot undertake that, but we are setting up a very impartial committee, on which two very efficient admirals are sitting, with educational authorities, and the Board of Admiralty, I am sure, will give an impartial judgment when the report of the committee is received.

Commander SOUTHBY: Will not this House have an opportunity of expressing its opinion on the findings of that committee before they are put into force?

Mr. ALEXANDER: The House will have the usual opportunities which are afforded on the Estimates.

Oral Answers to Questions — IRAQ.

PIPE LINE.

Major NATHAN: 33.
asked the Under-Secretary of State for the Colonies what is the position as regards the projected pipe-line from Iraq to the Mediterranean and the proposed route?

Mr. LUNN: I have been asked to reply to this question. I would refer the hon. and gallant Member to the reply which I returned on Monday to the hon. Member for Devonport (Mr. Hore-Belisha).

Mr. HORE-BELISHA: Are His Majesty's Government intending to intervene in these negotiations, or are they to be concluded independently of His Majesty's Government?

Mr. LUNN: I am not able to say whether His Majesty's Government will interfere as long as the negotiations are going on.

TREATY.

Mr. OLDFIELD: 44.
asked the Under-Secretary of State for the Colonies when it is proposed to ratify the Iraq Treaty?

Mr. LUNN: It is proposed to proceed to ratification as soon as possible when the King of Iraq is in a position to do so.

Mr. OLDFIELD: In view of the deep anxiety expressed by the Christian and Kurdish minorities in Northern Iraq, in the absence of any mention of safeguards in the Treaty, can my hon. Friend assure us that we shall have a full opportunity of discussing this Treaty in the House before ratification?

Mr. LUNN: I would like to refer my hon. Friend to an answer given by the Chancellor of the Exchequer last Session, in which he said that if there was a general desire for such a discussion this Session, my right hon. Friend would agree.

Oral Answers to Questions — HONG KONG (MUI-TSAI SYSTEM).

Mr. GRAHAM WHITE: 34.
asked the Under-Secretary of State for the Colonies if the Report of the Governor of Hong Kong on the first six months' working of the mui-tsai regulations has been received?

Mr. PHILIP OLIVER: 37.
asked the Under-Secretary of State for the Colonies whether any report has yet been received from the Governor of Hong Kong on the administration of the ordinance dealing with the mui-tsai system?

Mr. LUNN: The answer is in the affirmative. A copy of the report will he placed in the Library.

Mr. WHITE: In view of the wide interest in this matter, will the hon. Gentleman arrange that the report shall be more widely circulated?

Mr. LUNN: I will convey that request to my Noble Friend, with my own approval, that whatever can be done to deal with this question should be done.

Oral Answers to Questions — NIGERIA.

PUNISHMENT IN STOCKS.

Mr. HORRABIN: asked the Under-Secretary of State for the Colonies whether the Government propose to take action to abolish the punishment of public exhibition in the stocks to which certain natives were sentenced in Nigeria recently?

Mr. LUNN: No complaint has been received regarding this form of punishment, but the Governor is being consulted on the subject.

Mr. HORRABIN: Will the hon. Gentleman take into account the point of view that the infliction of this particular kind of mediaeval punishment is hardly likely to add to the prestige of the Government in Nigeria?

NATIVE CHIEFS AND RULERS.

Mr. HORRABIN: 41
asked the Under-Secretary of State for the Colonies if he is aware that an ordinance, entitled the appointment and deposition of chiefs ordinance, has recently been enacted in Nigeria.; and whether the governor is required to consult His Majesty's Government in any way before exercising the far-reaching powers regarding Native chiefs and rulers?

Mr. LUNN: With the approval of the Secretary of State for the Colonies, such an ordinance has recently been enacted in Nigeria. The Governor is not required to consult His Majesty's Government
before exercising the powers conferred upon him under the ordinance, but he would doubtless, consult the Secretary of State in any particular case in which he might feel in need of guidance.

Mr. HOLFORD KNIGHT: Does this ordinance provide any means of appeal against these Orders?

Mr. LUNN: I must ask my hon. Friend to put that question down.

PRINCE ELEKO.

Mr. HORRABIN: 42.
asked the Under-Secretary of State for the Colonies whether he has any information about Prince Eshugbayi Eleko, of Lagos, who was deported five years ago to Oyo, in Nigeria; what provision has been made for him in exile; and whether the Government will issue instructions for his release?

Mr. LUNN: Yes, Sir. The Secretary of State for the Colonies, has full information about the case in question. The matter was made the subject of an appeal to the Privy Council in 1927, and a further appeal to the Privy Council is now pending. The Secretary of State is unable to take any action in the matter while the case is still under consideration. I am informed that an allowance of £240 a year was paid to Eleko by the Nigeria Government up to the 30th of April, 1930, the allowance being then reduced to £120 a year to enable the Government to recover a sum of money which he owed them.

Mr. KNIGHT: Was this Prince given any means of being heard against this Order?

Mr. LUNN: I do not know whether the case is proceeding, or whether he is here or in Africa.

Mr. MALONE: How was the scale of unemployment benefit arrived at for this gentleman?

Mr. LUNN: Evidently he was better treated than the unemployed here.

Oral Answers to Questions — KENYA.

DEVELOPMENT SCHEMES (NATIVE AREAS).

Mr. CHARLES BUXTON: 36.
asked the Under-Secretary of State for the Colonies whether any schemes for tine development of native areas in Kenya have been
put forward in connection with the Colonial Development Fund; whether he can give the nature of the schemes, the districts concerned, the amount of cost in each case, and the total cost of such schemes; by whom these schemes were originally prepared; whether such applications were sent in to the committee appointed to deal with the fund; if so, what was the response given; and, if not, what were the reasons for the failure to send in the applications concerned?

Mr. LUNN: A scheme prepared by the Government of Kenya for the establishment of a meat factory for the disposal of surplus stock culled from native reserves has been received. The application was for a direct grant of £60,000 and for a loan of £40,000, free of interest for 10 years, from the Colonial Development Fund. The application has not yet been submitted to the Colonial Development Advisory Committee as it is still under discussion between my Noble Friend and the Colonial Government. It is understood that the Colonial Government also has under consideration schemes for the development of agriculture and animal husbandry in native reserves, for the construction of roads and bridges in native areas, and for the fencing of a stock route from the Northern Frontier Province to railhead.

Mr. BUXTON: Have the schemes to which my hon. Friend has referred been submitted yet to the Colonial Development Advisory Committee?

Mr. LUNN: I think I said in my answer that the scheme had not yet been submitted to the Colonial Development Advisory Committee, but that discussion was taking place between the Secretary of State and the Colonial Government.

Mr. BUXTON: Is the hon. Member aware that that relates only to the first big scheme, but that a large number of other local schemes were alluded to, and that I asked whether they would be submitted to the Advisory Committee?

Mr. LUNN: I am not aware of the state of the negotiations or agreement on the other schemes mentioned in the second part of the question.

NATIVE POLICY.

Mr. BUXTON: 39.
asked the Under-Secretary of State for the Colonies
whether the memorandum on native policy in East Africa has yet been sent out to all administrative officers in Kenya; and whether any steps have been taken to bring it to the notice of the non-European populations in that Colony?

Mr. LUNN: In view of the instructions mentioned in the foreword to the memorandum, my Noble Friend assumes that copies will have been supplied to administrative officers in all the East African Dependencies. No report of action taken to ensure wide publicity of the memorandum has been received, but there is no reason to suppose that the instructions in that sense will not have been complied with.

Mr. ANNESLEY SOMERVILLE: Have the representatives of the European population in East Africa made strong representations on this subject?

Mr. LUNN: That is not part of this question. It may be the subject of another question.

NATIVE AUTHORITY ORDINANCE.

Mr. BUXTON: 40.
asked the Under-Secretary of State for the Colonies whether his attention has been drawn to the fact that the orders recently issued in Kenya Colony under the Native Authority Ordinance, with regard to the collection of money in the reserves, have had the effect of preventing the collecting of money for many useful and desirable purposes; and Whether he will take steps to have the orders withdrawn?

Mr. LUNN: No, Sir. My Noble Friend is satisfied that the instructions issued by the Government. of Kenya ensure that there will be no interference with the collection of money among natives in the reserves for any purpose which is not unlawful.

Oral Answers to Questions — RHODESIA.

Earl WINTERTON: 38.
asked the Under-Secretary of State for the Colonies what reply has been set by the Secretary of State for the Colonies to the telegram sent him on 30th September last by the unofficial members of the Legislative Council of Northern Rhodesia inquiring whether His Majesty's Government in Great Britain would, in certain circumstances, sanction the amalgamation of the two Rhodesias; and what reply has been sent to a telegram on the
same subject sent him by the Government of Southern Rhodesia early in October?

Mr. LUNN: The Government of Southern Rhodesia has been informed by my right hon. Friend the Secretary of State for Dominion Affairs that their proposal for a conference will be considered and a reply sent as soon as possible. No reply has been returned to the unofficial members of the Legislative Council of Northern Rhodesia; my m Noble Friend the Secretary of State for the Colonies is awaiting the observations of the Governor before dealing with this matter.

Earl WINTERTON: Do I understand from the hon. Gentleman that no acknowledgment of this telegram has been sent?

Mr. LUNN: I could not. say whether an acknowledgment has been sent, but no reply has been sent, which may be a different thing from an acknowledgment.

Earl WINTERTON: In view of the fact that the telegram was sent by the whole of the unofficial members of the Legislature of Northern Rhodesia, and in view of the considerable constitutional and Imperial importance of the question, will the hon. Gentleman give an undertaking that at least an acknowledgment of the telegram will be sent, even if no reply is sent?

Mr. LUNN: Yes. With regard to Northern Rhodesia, I said that no reply had been returned, but that my Noble Friend was awaiting the observations of the Governor, and they are expected in about a fortnight's time.

Earl WINTERTON: In view of the fact that the telegram was sent over a month ago, and that it was signed by the whole of the unofficial members of the Legislature, does, not the hon. Gentleman think it would be a matter of ordinary courteous practice to send an acknowledgment?

Mr. LUNN: I should think it would, but to send a reply, as the Noble Lord should know, is a matter for the Secretary of State to consider and to consult with the Governor of the Colony.

Oral Answers to Questions — GOLD STOCKS AND STANDARD.

Mr. ARTHUR MICHAEL SAMUEL: 45.
asked the Prime Minister whether he will call for an early report from the Economic Advisory Council dealing with the question of how world prices and employment are affected by the present disequilibrium of gold stocks and the distortion of the international working of the gold standard arising from the abnormal accumulations of gold in France and the United States of America?

The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden): The hon. Member's question raises difficult and disputed issues, international in their range. I shall not attempt within the limits of a Parliamentary answer to pass judgment upon the questions which the hon. Member has by implication raised. The Gold Delegation of the League of Nations is now conducting an international inquiry into various aspects of the gold question, and I see no purpose in duplicating that investigation.

Oral Answers to Questions — NAVAL DISARMAMENT.

Lieut.-Commander KENWORTHY: 46.
asked the Prime Minister whether his attention has been called to the scrapping by the United States of three super-dreadnought battleships in advance of the Naval Treaty date, by which it is anticipated that 4,000,000 dollars will be saved; and whether we intend to reciprocate by advancing the date of scrapping of some of our own battleships surplus to the treaty limitations?

Mr. P. SNOWDEN: Information has been received that one of the United States battleships to be disposed of has been de-commissioned and that the other two have been placed in reserve. No information has yet been received, however, as to when work on these three vessels is to commence. We have already proceeded one step further, as the "Benbow" has been paid off, and the work of preparing the ship for sale is already in hand.

Oral Answers to Questions — UNEMPLOYMENT (ADMINISTRATION).

Lieut.-Commander KENWORTHY: 47.
asked the Prime Minister whether any alteration in the duties of Ministers deal-
ing with unemployment has been made since the Lord Privy Seal and Chancellor of the Duchy of Lancaster assumed their present offices; and whether he will state briefly what is the present arrangement of duties for such purpose?

Mr. P. SNOWDEN: Each Departmental Minister will continue to be responsible under the Cabinet for matters arising within his own field. The Cabinet in exercising its general responsibility has the assistance of a special Committee of Ministers of which both the Lord Privy Seal and the Chancellor of the Duchy are members.

Lieut.-Commander KENWORTHY: May I have the last part of my question answered a little more explicitly? Has there been a change in the arrangement to which the right hon. Gentleman ha; just referred since the present hon. Gentleman and right hon. Gentleman were appointed to these offices?

Mr. SNOWDEN: Does the hon. and gallant Member mean since the Dominion Secretary ceased to be Lord Privy Seal?

Lieut.-Commander KENWORTHY: Since the right hon. Member for Ogmore (Mr. Hartshorn) and the hon. Member for Limehouse (Mr. Attlee) were appointed.

Mr. SNOWDEN: There has been no change, so far as I know, since they took office. Of course, there is no Minister now who has the full responsibility for unemployment as the previous Lord Privy Seal had.

Sir ARTHUR STEEL-MAITLAND: Will an opportunity be taken for implementing the statement made at the General Election that unemployment will be dealt with by a special committee of the Cabinet, of which the Prime Minister will be Chairman?

Mr. SNOWDEN: That is exactly what is being done

Oral Answers to Questions — TRADE DISPUTES BILL.

Mr. DOUGLAS HACKING: asked the Prime Minister when he intends to introduce the Trade Disputes Act Amendment Bill?

Mr. P SNOWDEN: The Prime Minister is not yet in a position to name a date.

Mr. HACKING: Is it still the determination of the Government that this Bill should be well on the way to the Statute Book before Christmas?

Mr. SNOWDEN: indicated assent.

Sir K. WOOD: What is the reason for the delay, in as much as the Solicitor-General in the last Session said that the Bill was in draft; and does not the right hon. Gentleman think, in view of the letter of the right hon. Member for Spen Valley (Sir J. Simon) to-day, that the matter ought to be expedited?

Mr. SNOWDEN: I have not seen the letter of the right hon. Member for Spen Valley, but I think that the right hon. Gentleman is a little bit precipitate. It was only last night that we finished the general debate on the Address.

Oral Answers to Questions — AIRSHIPS.

Mr. HORE-BELISHA: 50.
asked the Under-Secretary of State for Air whether the dependants of those who lost their lives on the R.101 are now receiving dependants' pensions?

The UNDER-SECRETARY of STATE for AIR (Mr. Montague): I would refer the hon. Member to the reply given to the hon. Member for Northampton (Mr. Malone) on 30th October.

Mr. HORE-BELISHA: Is the answer briefly in the affirmative?

Mr. MONTAGUE: I would ask the hon. Member to wait for a reply to a written question by the right hon. Gentleman the Member for Chelsea (Sir S. Hoare) to-morrow.

Mr. HORE-BELISHA: On a point of Order. If my hon. Friend knows the answer to my question, why should it be postponed until to-morrow when apparently there is a written question down?

Mr. MONTAGUE: I know the general terms of the answer, but I have not the detailed answer with me.

Mr. HORE-BELISHA: On a point of Order. If an hon. Member puts a question and the Minister does know the answer, is it proper that he should refer me to an answer, which has not yet been given, to a written question, and which will not be given in the House?

Mr. SPEAKER: The Minister does not know the exact terms of the answer.

Lieut.-Commander KENWORTHY: This is a matter which may affect us in future Parliaments as well as this one, and the point for consideration is that any Government may desire—not of course in this case—to avoid giving an answer to a question on the Floor of the House, and can then refer the hon. Member to a written answer to be given the next day. I put it to you, Sir, that the least that can be done for the rights of private Members is that the hon. Member should be asked to postpone this question. Otherwise, we can be prevented from putting questions of public interest in this or future Parliaments.

Mr. ALBERY: Would you, Sir, permit the Minister to obtain the answer and give it orally at the end of questions?

Mr. SPEAKER: I do not think that the House is in any danger such as the hon. and gallant Gentleman suggests. Such questions as these must be considered on their merits at the time.

Mr. ERNEST BROWN: May I put it to you, Sir, that this may create rather a serious precedent? It may be a quite convenient course for a Minister, but very inconvenient for the House. Surely the hon. Member who puts a question down first should be entitled to an answer, if it can be given? If not, a Minister may suggest to a back bencher to put down a question next day for a written answer, and discussion of a very grave question of public policy may in that way be burked on the Floor of the House. With all respect, Sir, I submit that this is a very important paint.

Sir JOSEPH LAMB: May I ask whether it would not be possible for this question to be starred to-morrow?

Mr. HORE-BELISHA: May I submit this further point of importance? After the answer to an oral question we have the right to put supplementary questions, whereas if I am to be referred to a written answer to-morrow I, in common with the whole House of Commons, am deprived of the opportunity of raising what may be points of very serious importance.

Mr. SPEAKER: The danger I fear is that we may create further precedents by
an alteration of the rule, but, with the leave of the House, I see no objection to this question being starred to-morrow.

Mr. DAY: 54.
asked the Under-Secretary of State for Air whether he can give the approximate cost of the past and present upkeep of the Airship R100; and whether, in view of recent events, any further decision has been arrived at as to the use of this particular airship?

Mr. MONTAGUE: In answer to the first part of the question, the cost of upkeep—including pay and wages of officers and crew, cost of hydrogen and overhead charges—could normally be taken as approximately £600 a week. This, however, is the cost of keeping the airship in flying condition, with running repairs. The present expenditure is considerably less, but no definite weekly figure can be quoted. As regards the second part of the question, no decision will 'be made until the report of the Court of Inquiry now investigating the loss of R.101 has been received and considered in all its bearings on future airship policy.

Mr. DAY: Is it not possible for my hon. Friend to give us some estimate of the present cost?

Mr. MONTAGUE: No, not anything more than I have said in the reply. It is considerably less than £600.

Mr. DAY: Is it a half that sum?

Mr. HORE-BELISHA: Can the hon. Member say whether a number of men have not lost their employment in connection with this airship, and what is being done for them?

Mr. MONTAGUE: I do not see that that question arises out of the answer. It is certainly true, regrettably true, that men have lost their employment— simply because there is no work for them.

Mr. WISE: 55.
asked the Under-Secretary of State for Air if his Department is placing at the disposal of the R.101 court of inquiry a complete copy of the report of the United States court of inquiry into the loss of the airship "Shenandoah," that that court may not merely have to depend upon a description or summary of its contents?

Mr. MONTAGUE: Copies of the report referred to are already in possession of the Court.

Mr. WISE: 56.
asked the Under-Secretary of State for Air how many British airships have been built, or partly built, or begun since the armistice; how much has been spent upon each of them; what has been done with the two German airships taken over at the armistice; whether any money was spent upon them; and if he will give a complete account of each of these constructions, or attempts to construct, to the R.101 court of inquiry, with full details of how or why each was lost, abandoned, or scrapped?

Mr. MONTAGUE: As regards the first two parts of the question, the only airships begun and built since the armistice are the R.100 and R.101, but work was done after the armistice on five other airships which were then under construction, namely, R.33, R.36, R.80, R.38 and R.37. All except the last of these were completed. The cost of construction of each of the airships was approximately as follows: R.33 and R.36, £350,000 each; R.80, £275,000; R.38 £500,000; R.37 (not completed), £325,000; R.100, £350,000 (contract price); R.101, including insertion of additional bay and other alterations, £640,000. As regards the third and fourth parts, the two German airships taken over at the armistice were dismantled some time after delivery, being unsuitable for the Air Ministry programme; the total expenditure on theca was approximately £1,000. As regards the last part of the question, the Court has already been given particulars of the British airships built before R.100 and R.101, and further information will be supplied if asked for by the Court.

Mr. MALONE: 57.
asked the Under-Secretary of State for Air what is the present position of airship R 100; is this airship now the property of the Air Ministry; is further use to be made of this ship; is a decision on this question dependent on the results of the R 101 inquiry; if so, will the scope of the R 101 inquiry cover this point; what payments have been made for airship R 100, and to whom; and whether any further payments are still due?

Mr. MONTAGUE: As regards the first part of the question, R 100 is at present being deflated, and concurrently a full inspection of the hull structure is in
progress, together with minor repair work. Later the cover will be removed. As regards the second part, the airship has not yet been formally accepted by the Air Ministry pending the completion of certain repairs made necessary on the trial flight. As regards the third, fourth and fifth parts, a decision as to the further use of R 100 will not be taken until after the investigation into the loss of airship R 101 has been completed. For this purpose, the results of the investigation, which is, however, specifically directed to the loss of R 101, will be taken into consideration, in common with a number of other factors. As regards the last two parts of the question, £337,000 has already been paid to the Airship Guarantee Company; a- further payment of comparatively small amount will become due on satisfactory completion of repairs: its amount cannot yet be definitely stated.

Oral Answers to Questions — ROYAL AIR FORCE.

HALTON CAMP (MILK SUPPLIES).

Mr. de ROTHSCHILD: 51.
asked the Secretary of State for Air whether he intends to discontinue the provision of imported dried milk to the members of the Royal Air Force stationed at Halton camp, in one of the principal dairying districts in England, and to take steps to have fresh healthy milk supplied to them in its stead?

52. Brigadier-General CLIFTON BROWN: asked the Under-Secretary of State for Air whether he is aware that the members of the Air Force at Halton camp are supplied with reconstituted milk made by an emulsifier instead of with fresh milk; and what are the countries in which the ingredients of this beverage are produced?

Mr. MONTAGUE: Milk is not an item of the public ration scale for the Royal Air Force at Home, but, with some other articles of diet, is purchased locally by airmen themselves out of a daily cash allowance. The airmen's messing committee are free to decide upon the type of milk to be purchased, and at Halton they decided to use emulsified milk, made on the station by their own emulsifier. The ingredients at present used are Canadian milk powder and New Zealand fresh butter. The product satis-
fies the Royal Air Force medical authorities, and it is not proposed to interfere in what is considered to be a domestic matter of the unit.

Mr. BEAUMONT: Is the hon. Member aware that the reason for that change was the inordinate profits that were made out of fresh milk by the Navy, Army and Air Force Institute? Does he propose to take any steps to prevent those inordinate profits being made?

Mr. MONTAGUE: I am not aware of the truth of that statement, and I would like to point out that this regulation for local option, as it were, is a very old-established one in the Army as well as in the Air Force.

Mr. BEAUMONT: When the hon. Member talks about local option, is he aware that the unit is compelled to buy through the Navy, Army and Air Force Institute, and it is the question of their profits which prevents this milk being bought locally?

Mr. MONTAGUE: I will look into that point. I was not aware of the point suggested. So far as the answer to the question is concerned, I do not think I can add anything to what I have said.

Brigadier-General BROWN: Is it the policy of the Air Ministry to provide all the air depots with iron cows, instead of dealing with the sellers of milk locally?

BOMBING PRACTICE (BERKSHIRE DOWNS).

Major GLYN: 53.
asked the Under-Secretary of State for Air if he is now in a position to state what decision has been made regarding the purchase of land on the Berkshire Downs, in the vicinity of the White Horse Hill, by the Air Ministry in order to provide an area on which to drop bombs from aeroplanes?

Mr. MONTAGUE: It is not now proposed to proceed with the purchase of land to which the hon. and gallant Member refers.

Major GLYN: May I assume, therefore, that all danger from this source is at an end, so far as the hon. Member can see?

Mr. MONTAGUE: So far as that piece of land is concerned.

Major GLYN: Or anything in the neighbourhood?

Oral Answers to Questions — TRANSPORT.

SOUTHAMPTON DOCK EXTENSION SCHEME.

Mr. ALBERY: 58.
asked the Minister of Transport the extent and nature of the assistance which is being given to the Southern Railway Company by His Majesty's Government for new dock schemes at Southampton?

The MINISTER of TRANSPORT (Mr. Herbert Morrison): Grant has been approved in principle under Section 2 of the Development (Loan Guarantee and Grants) Act, 1929, for the purpose of assisting the Southern Railway in defraying in part during a period of 9½ years the interest payable in respect of the moneys to be expended (provisionally estimated at £3,000,000) upon a further section of the Southampton Dock extension scheme. The present value of the grant represents slightly over 18 per cent. of the estimated total cost of the extension.

LONDON UNDERGROUND RAILWAYS (LIVERPOOL STREET-ILFORD).

Major NATHAN: 59.
asked the Minister of Transport whether steps are being taken for the construction of a tube railway from Liverpool Street via Bethnal Green to Ilford and beyond?

Sir GEORGE HAMILTON: 63.
asked the Minister of Transport whether his negotiations with the London and North Eastern Railway Company have yet resulted in any concrete proposal for a tube to Ilford and the East of London?

Mr. HERBERT MORRISON: I have been informed by the London and North Eastern Railway Company that they have received and are now considering the report of the engineers appointed to investigate the possibility of constructing a tube railway to Ilford, and that at this stage they are not in a position to make any further announcement.

Major NATHAN: Will the Minister of Transport see that his Department does all it can to expedite the construction by the North-Eastern Railway Company of this tube?

Mr. MORRISON: Certainly, within the limits of the fact that the railway does not belong to me, but belongs to private enterprise.

Sir G. HAMILTON: Is it not a fact that the Minister of Transport is subscribing a considerable amount of funds towards the construction of this tube, and in these circumstances would it not be possible for the Minister to use that lever to urge the company on?

Mr. MORRISON: Obviously, I am not subscribing any money until it has been decided that the railway is to be built.

Major NATHAN: May I ask, in view of the fact that yesterday the Minister of Transport claimed credit for what was done by the railway companies, he will not avoid responsibility?

Mr. MORRISON: Not at all. Because I claimed credit yesterday I am not bound to accept the responsibility. The works in respect of which I gave particulars yesterday would not have been done at all if it had not been for the Labour Government.

WATERLOO AND CHARING CROSS BRIDGES.

Major NATHAN: 60.
asked the Minister of Transport if he will state the present position with regard to the Charing Cross and Waterloo bridges scheme?

Mr. MORRISON: The committee appointed by the London County Council to advise them on the subject of a Charing Cross bridge have not yet reported, and I understand that the question of the reconstruction of Waterloo Bridge is in the meantime in abeyance.

RIVER TAMAR (BRIDGE).

Mr. HORE-BELISHA: 61.
asked the Minister of Transport whether he is taking any steps to secure agreement with the Admiralty on the points under consideration regarding the proposed bridge over the Tamar?

Mr. MORRISON: The problem of road communications across the Tamar is still the subject of discussion between the Admiralty, the local authorities and my Department.

Mr. HORE-BELISHA: Will the Minister of Transport use all his good offices, and those of his experts, to persuade the Admiralty to accept the scheme?

Mr. MORRISON: The hon. Gentleman may rest assured that I shall do whatever is right in all the circumstances of the case.

Roan WORKS (KERBS).

Mr. LOUIS SMITH: 62.
asked the Minister of Transport whether, in view of his note to divisional road engineers in favour of the use of British kerb in road-making, he can state whether imports of Norwegian granite kerb are still coming into this country, and to what extent?

Mr. MORRISON: I believe that Norwegian granite kerb is still imported. I understand that owing to the large programme of road works now in hand, there is such a wide demand for British granite kerb, that highway authorities, much to my disappointment, experience great difficulty in obtaining their requirements from British quarry owners.

Mr. SMITH: Seeing that there is apparently some difficulty in carrying out the request of the Minister of Transport, could not the hon. Gentleman, in future, lay down such regulations as would notify to local authorities that no further importations should take place?

Mr. MORRISON: The hon. Gentleman has missed entirely the point of my reply. That was the question upon which the quarry owners came to see me. I circularised the local authorities, and asked them to do everything they could to use British kerbs. The trouble now is that the British quarry owners are not ready to supply them.

Dr. VERNON DAVIES: Is the Minister aware that it is suggested that in Lancashire there is a certain substitute which is just as good?

Mr. MORRISON: We have heard about that before, but it would have to be examined in order to see whether it is just as good.

Dr. DAVIES: That is so.

Mr. SMITH: Will the hon. Gentleman examine it?

MOTOR COACHES (SPEED).

Sir GEORGE PENNY: 64.
asked the Minister of Transport whether, in view of the high speed at which many of the
heavy passenger motor coaches are driven on the roads, he will make it compulsory for a schedule time record of each journey to be made by the driver, both as a protection to the public and to provide evidence should it be required in case of accidents?

Mr. HERBERT MORRISON: Subsections (3) and (5) of Section 72 of the Road Traffic Act, 1930, provide for the submission to the Traffic Commissioners of time-tables or of other particulars as to the times to be taken on the journeys and the Commissioners are required to refuse road service licences if, from the particulars deposited, it seems likely that the speed limit applicable to the vehicle will be contravened. It will be for the Traffic Commissioners to consider whether in certain cases the maintenance of a time record should be made a condition of the grant of a road service licence.

ROAD SURFACE (RUBBER).

Sir G. PENNY: 66.
asked the Minister of Transport whether rubber is being used in any of the experiments which are being carried out in regard to road surfacing; and, if not, whether he will take steps to see that experiments are undertaken with this commodity, in view of its durability and sound-deadening properties and the fact that its present low price now compares more favourably with other materials?

Mr. HERBERT MORRISON: Rubber is not being used in any of the experiments which are at present being carried out by my Department in regard to road surfacing. The experimental sections of rubber paving already laid in London are, however, kept under observation by my technical officers. I have appointed a Technical Advisory Committee to advise me as to the experiments to be undertaken by my Department and I will have the suggestion of the hon. Member brought to their notice.

TRAFFIC INSPECTORSHIPS.

Sir ERNEST BENNETT: 67.
asked the Minister of Transport whether, in the application forms for traffic inspectorships applicants were required to give information as to any naval or military service on their part?

Mr. HERBERT MORRISON: Yes, Sir.

Sir E. BENNETT: May I ask why the question of military or naval service should enter into the matter of such appointments?

Mr. MORRISON: That is a matter of general Government practice for which I am not responsible. In any case, if an applicant had served in one of the armed forces, we should want to know in order to ascertain the record of his service.

Sir E. BENNETT: Is it necessary that that practice should be continued under the Labour Government?

Mr. MORRISON: That is not a question for me to answer, and it should be addressed to the Financial Secretary to the Treasury.

Mr. EVERARD: Is preference to be given to conscientious objectors?

Oral Answers to Questions — ELECTRICITY SUPPLIES (NORFOLK).

Viscount ELMLEY: 66.
asked the Minister of Transport whether any experiments in electrification are being carried out in Norfolk; and, if so, will he give particulars?

Mr. HERBERT MORRISON: With the assistance of a grant through the Unemployment Grants Committee, the Corporation of Norwich have undertaken to carry out an intensive scheme of rural electrification over an area of about 125 square miles. The Electricity Commissioners propose to publish a description of the scheme, and this is in course of preparation.

Viscount ELMLEY: Can the Minister say when that report will be published?

Mr. MORRISON: I could not say, but when I know I will advise the Noble Lord.

Oral Answers to Questions — BALLOT FOR NOTICES OF MOTIONS.

ACCIDENTS IN MINES.

Mr. SUTTON: I beg to give notice that, on this day four weeks, I shall call attention to Accidents in Mines, and move a Resolution.

DUMPING OF CEREALS.

Brigadier-General CLIFTON BROWN: I beg to give notice that, on this day four weeks, I shall call attention to the Dumping of Cereals, and move a Resolution.

HOUSE OF COMMONS PROCEDURE.

Mr. BROOKE: I beg to give notice that, on this day four weeks, I shall call attention to the Need for a Reform in the Procedure of this House, and move a Resolution.

WOOLLEN TEXTILE INDUSTRY.

Mr. BEN RILEY: I beg to give notice that, on this day four weeks, I shall call attention to the condition of the Woollen Textile Industry, and move a Resolution.

BILLS PRESENTED.

PROTECTION OF DOGS BILL,

"to prohibit the vivisection of dogs," presented by Sir Robert Gower; supported by Lieut.-Colonel Moore, Mr. Bromley, Mr. Freeman, Lieut.-Commander Kenworthy, and Mr. Markham; to be read a Second time upon Friday, 6th March, and to be printed. [Bill 36.]

COAL MINES (PROTECTION OF ANIMALS) BILL,

"to amend certain provisions of the Coal Mines Act, 1911, relating to the care and protection of horses and other animals used in mines," presented by Sir Robert Gower; supported by Captain Balfour, Lieut.-Colonel Moore, Sir George Jones, Dr. Vernon Davies, Major Graham Pole, Mr. Oliver Baldwin, Dr. Burgin, M. Freeman, and Mr. Markham; to be read a Second time upon Friday, 6th March, and to be printed. [Bill 37.]

AGRICULTURAL LAND (UTILISATION) BILL,

"to promote the better utilisation of agricultural land in Great Britain and the settlement of unemployed persons thereon; to amend the law relating to small holdings and allotments; and for purposes connected with the matters aforesaid," presented by Dr. Addison supported by Mr. William Adamson, the Lord Advocate, Mr. Atlee, and Mr. Johnston; to be read a Second time upon Monday next, and to be printed. [Bill 38.]

MESSAGE FROM THE LORDS.

That they have passed a Bill, intituled, "An Act to empower the London County Council to make a new street, street improvements, and other works in the vicinity of the Elephant and Castle and to construct and work new tramways in connection therewith; and for other purposes." [London County Council (Improvements) Bill [Lords].]

LONDON COUNTY COUNCIL (IMPROVEMENTS) BILL [Lords],

pursuant to the Standing Order of the 29th July, 1930, read the First time; and ordered to be read a Second time.

STEEL INDUSTRY.

Major BEAUMONT THOMAS: I beg to move,
That this House views with grave apprehension the present condition of the Iron and Steel Industry, and urges the Government to take immediate steps to stem the continuous decline in the activities of this industry with its resultant increase in unemployment.
In moving this Motion I offer no apology for the fact that this matter was debated only last February. The condition to-day is so serious that I think that in all quarters of the House there is a desire that the position should be discussed, and events have taken place only recently which have so accentuated the gravity of the position that I think it is only proper that we should have an opportunity of discussing this matter in all its bearings. I have purposely worded this Motion so that it may not be taken in any quarter of the House as being in any way of an aggressive nature. In this industry we want this matter discussed as a business matter, and I hope that it will be in that atmosphere that this debate will be carried on this afternoon.
This industry is one of the key industries of this country, not only because it is capable of providing employment for a very large number of people, but because the production of iron and steel is a vital necessity to many of our chief industries. Since this matter was raised in the House last February, we have had the advantage of the publication of the report of the delegation which visited the Continent. The Government are to be congratulated on having appointed that delegation, and we have now in our hands information which we had not when this matter was dealt with last February. I would like to draw attention this afternoon to that report. The report dealt with Europe in particular, and, in every country visited by the delegation, production and exports have gone up very considerably. In the case of France the production has more than doubled, and exports have gone up sevenfold since 1913. We can all appreciate that that production, and those exports have been affected by the fact that France has received a large portion of industrial territory, and, naturally, we must take that
fact into consideration. In Belgium and Luxemburg, production has doubled and exports have gone up threefold. In Germany, which has been subjected to big losses of industrial territory, production and exports are practically the same as they were in 1913. In Czechoslovakia, a comparatively new country, production may be said to have increased fourfold, and exports in proportion.
In this country—and I regret to say that this information was not given in the report published to this House, and I consider that we in this House would be very much more capable of carrying out our duties if we had the fullest information at our disposal—in Great Britain, production has decreased by 698,700 tons, and exports have dropped by 589,800 tons. An hon. Member mentioned to me yesterday, that, in spite of that fact, this country last year produced a record quantity of steel. That is perfectly true, but we have not kept pace with other European countries, and in a race, unless you keep level with the rest, you are doing nothing but going back. I may add that, for the month of September this year, our exports have fallen to 200,280 tons, which is lower than for any month since April, 1926; while our imports have amounted to 223,800 tons. That is to say, our imports are greater than our exports, and we have now 38 per cent. of insured workers in the industry unemployed.
The charge is made against this industry in this country that it is inefficient. On that point may I say that the delegation, which visited various plants on the Continent, also visited representative iron and steel plants in this country, and this is what the delegation reported:
As regards efficiency and management, and the modernity and equipment of certain units of plant, they were equal to, and in some cases superior to the iron and steel plants which have been seen on the Continent.
I may also point out that steel is being produced in this country to-day at practically speaking pre-War cost, and I think that that will prove that the charge of inefficiency cannot hold good. That is in spite of the fact that, as is well known, wages and certain charges have risen considerably. We also know that the largest proportion of the cost of production of iron and steel is the labour cost.
To return to the report, what must strike one more than anything else are the conditions under which this industry is carried on on the Continent. Not only are wages about half of what they are in this country, but the hours of working, the system of payment, and the conditions generally are such as would not be tolerated in this country for one single moment. I know that that brings the reply that that is in countries which are under Protection. My reply to that is that the reason for these facts is that undoubtedly, in those countries, trade union organisation does not exist as it does in this country. That being so, we have to face that as a fact, and we have to appreciate that we have built up in this country a set of conditions which, somehow or other, we have got to protect, safeguard and preserve. While I am on the subject of hours, it is rather interesting to note that many of these countries have signed the Washington Hours Convention, and yet the Washington Hours Convention is not carried out in the spirit in which it has been in this country for many years.
4.0 p.m.
Nobody will deny that there has been a very large increase in the production of steel since the War, and the demand has not kept pace with it; and during the last few years schemes have been set up on the Continent, not only to control output, but also to control prices. These schemes have, during the last few months, practically collapsed, They had been effective in keeping up the price of steel on the Continent, and they had also been effective in keeping in operation in this country the more efficient portions of the industry. During the last few months there has been a complete collapse in prices, and to-day we have to face an entirely different situation. What is the situation to-day? We can buy at the present moment Continental sheet bars free on truck in South Wales at £3 13s. 6d. The South Wales works cost is £4 17s. ed. That cost is only obtained by the use of a very large amount of scrap, and I may say that it is within a very few shillings of the cost in 1913. The price which is quoted, namely, £3 13s. 6d., is considerably lower than the price which is charged in the home market on the Continent. The home price for sheet bars in Belgium is about £4, and the ex-
port price £3 9s. In France, the home price is £5, and the export price £3 9s. We are faced with this situation, that Continental manufacturers have made up their mind that there is only one thing to do, and that is to dump steel into this country so as to put the steel industry in this country out of existence altogether. After they have accomplished that, we shall then be entirely at their mercy, and they will be able to ask whatever price they like. This week, joists are being ordered and delivered in Sheffield at £4 17s. 6d. per ton. The British price is £8 2s. 6d. I think this House must agree that the position is an impossible one.
The President of the Board of Trade has asked this industry what it proposes to do. The answer is a perfectly simple one. Unless some solution is offered by this House, the industry must cease to exist. Therefore, I have brought the matter before this House to-day, because I believe that in all quarters, irrespective of party, we are realising that this matter, like others, must be discussed and thrashed out on business lines. First of all, we want to know the facts, anti then to discuss various solutions which are put forward, and carry our decisions into effect. Something has got to be done, and I want to say a word about the suggestions which have been put forward during the last few years. At one time nationalisation was put forward as a solution for all our difficulties and all our ills. This is not a question of proprietorship, or ownership, or anything else like that.. If this industry were taken over by the State to-morrow, they would still be faced with exactly the same facts. They would he faced with the fact that they cannot produce steel and sell it at £3 13s. 6d. per ton. They would be faced with the report which has been issued to us, showing where the difference in conditions of working lies, and I do not think that there is anybody in this House who seriously considers to-day that nationalisation would solve the difficulty.
The word "rationalisation" has been freely used by important Members of this House. We are going to have a debate on rationalisation later in the day, and we may then learn something more about what that 'word exactly means. I believe there are very few people who know what it means, but, in any ease, it means,
undoubtedly, reorganisation of some kind, amalgamation by districts, horizontal or vertical, and so on. Any form of rationalisation or reorganisation requires financial assistance, and the Government and this House know perfectly well that that financial assistance is not forthcoming in any shape or form as long as there is no security offered in the shape of markets in the future. Another solution has been put forward, namely, some form of protection, and I am well aware that there are those who sit on all sides of this House who have come to believe that some form of protection will be necessary if this industry is to continue to exist. But I realise that on this matter we shall never be permitted a free vote of this House. I am perfectly certain that if we had a free vote of this House on this question it would be carried by a large majority.
Therefore, I propose to put forward this afternoon another suggestion. It is not a new one, and I offer it only as a temporary solution for the difficulties with which we are faced. In order to illustrate this suggestion, I propose to give to the House a concrete case of a steel plant at the present moment in operation, but which, I regret to say, will probably be closed within the next few days. This plant -happens to be part of what I will call a completely rationalised organisation which starts with digging up the ore and the coal and ends by selling the semi-finished product. It is rationalised in that respect as far as it is possible to rationalise anything. It is producing at the present time 2,700 tons of pig iron and 2,500 tons of steel per week, and could produce, if there were a demand for it, 3,500 tons of steel per week. It provides employment directly for 1,080 men in that plant itself, and 1,450 men in the production of the coal required, which, in this case, is about 7,000 tons per week. The wages of these men average £7,600 per week. The figure is based on the actual average wage paid. Steel produced at this plant can be delivered in Wales at a cost of £5 per ton. Those who are concerned in the industry here will know that that cost is only obtained by efficient working, and compares favourably with any other cost in this country. This same steel, as I have already stated,
can be bought from the Continent at £3 15s. per ton; in other words, 25s. a ton cheaper.
What is that organisation to do? It can do nothing else but shut down the steel producing side of its business, which is what has happened throughout the country during the last few weeks. What will be the result? The result in this particular case will be that 2,530 men will lose their employment. They will draw unemployment pay and, instead of having a. purchasing power of £7,600 per week, they will be reduced to, roughly speaking, £3,100 per week, which they receive from the Unemployment Fund, and the locality in which they live will suffer accordingly.

Mr. T. GRIFFITHS: What process is carried on at these works—Bessemer or open hearth?

Major THOMAS: Both. I suggest that it would be more businesslike to use this money, or a portion of it, to help to keep this plant in operation. As an example of what might happen in a case like that, supposing a subsidy of £1 per ton of steel produced were decided upon, it would come to £2,300 per week, and would enable the steel to be sold at the Continental price, thereby meeting the objection of those re-rollers, if any, who may have Free Trade ideas, while 2,530 men would not be added to the already large number of unemployed, and they would not have their purchasing power reduced from £7,000 to C3,100 per week. The Unemployment Fund would be saved a matter of £663 a week. I realise that there are objections to this scheme. There was a memorandum published in 1923, and republished in 1925, which gave the objections to such a scheme as this. I have read through this White Paper, and I must confess that the objections did not appear to me to be in any way insurmountable.

Mr. CECIL WILSON: Might I ask what is the number of the Paper?

Major THOMAS: It is a Ministry of Labour Memorandum on unemployment benefit and relief works, published in 1923, and reprinted in 1925. The principal objections to this scheme are very obvious without looking at the White Paper. First of all, the objection is that this money comes out of the
wages of the employés—that is perfectly true—out of the wages of the employers and out of the wages of the State. Whosoever wages it comes out of, surely it comes out of industry to start with, and I do not see any objection to money which has come out of industry being used to keep an industry in existence at a time of great emergency and to enable men to remain in employment and to retain their purchasing power.
There is a further objection, and I think this is the chief one. This money might enable a firm to make unreasonable profits or to prevent losses, which, after all, comes to the same thing. I agree that any firm accepting assistance under a scheme of this kind would also have to accept some limitations in this respect, and I do not think, with the steel industry in its present condition, it would be difficult to get reasonable terms agreed to. The suggestion that has been made lately of raising a loan and spending £200,000,000 or £250,000,000 on national works means spending money on works which will bring in nothing at all. In nine cases out of ten no return will be acquired from the money that is spent. It would be very much better, if we are going to raise loans or spend large sums of money of that kind, to apply the money to the assistance of the industries of the country rather than to schemes which bring in no return when, after they have been concluded, we shall still have the same problem to face. I dislike the idea of subsidies as much as anyone, but this is an extremely serious matter. It has to be dealt with, not within the next few years or even the next few months, but the next few weeks. If it is not, it will be too late.
I know the difficulties with which this House is faced. We have to carry on the government of the country by means of Parliament. No one in the House believes that a single word in the speech winding up the Debate last night will help anyone outside the House. We are faced with a very serious position, and it requires emergency measures. I would ask that this should be discussed as a national matter and that we should give a lead to the Government that some steps must be taken to deal with it. I believe there is very shortly to be another meeting between the Government and those who represent the
industry, I hope it will be more fruitful than the last one and that this time some solution will be arrived at. After all, the steel industry is in such a plight that it is willing to accept any help that may be offered, and I think it is the duty of the Government of the country, to whatever party it belongs, to tackle the question at once, or the time will come when the country will be nothing but a commercial country and not an industrial country at all. That will simply mean that we shall be forced to emigrate our people by hundreds of thousands, because there will be nothing for them to do.

Mr. RAMSBOTHAM: I beg to second the Motion.
It calls on the Government to take immediate steps. I am not sanguine that it will take immediate, or any, steps to remedy the position. My hon. and gallant Friend has pointed out most clearly that the iron and steel industry is in a, very bad way indeed. It has never been worse, and there has been a progressive deterioration for the last 18 months. But during the whole of that period the Government have not produced a remedy of any kind calculated to assist the position unless it be a sort of attitude of political Christian Science fortified by the admirable bedside manner of the President of the Board of Trade, which is so soothing in the House. The right hon. Gentleman alluded on Monday in certain terms to the industry and to a certain solution of its difficulties. He alluded to the solution, which he said had been proposed in some quarter, of a reduction of wages. He naturally and properly passed that by. He also alluded —and this solution he favoured—to a drastic and whole-hearted reorganisation. The third solution to which he alluded, assistance by protective tariffs, made no appeal to him. His argument was quite clear. He assumed that protective tariffs would raise prices. I should have thought an accurate man like the right hon. Gentleman might have made some qualification from his experience of the safeguarded industries. On the assumption that prices were raised, a reduction of wages would be achieved.
I want to deal with this question of real wages, not in any controversial spirit, but in the hope that there will be no latent contention discovered in the words I use. In a country like our own,
dependent very largely on international trade, a steady, rapid rise in real wages unaccompanied by a corresponding rise in production, or an equivalent increase in real wages among our competitors, is apt to cause certain economic trouble. That must be evident to all. I will give one or two figures. Between 1913 and 1926, real wages advanced, per hour, measured by the cost of living, 30 per cent. In the 27 years prior to 1913 they advanced by 22 per cent., so that, in spite of the fact that we have had an appalling war which cost thousands of millions of pounds and hundreds of thousands of valuable working lives, we have nevertheless been able to achieve a considerably greater increase in real wages in the last 13 years than we were able to achieve in the 27 years prior to that. It is a great achievement, but it is going to be a very difficult matter to maintain it, particularly in the iron and steel trade, a trade in which there is to-day 38 per cent. of unemployment. Over a third of the men engaged in it have nothing to do. It is 15 per cent. worse than it was nine months ago. For all we know it may be 50 per cent. at Christmas. It is not so much a question for these men of real wages or nominal wages. It is a question of any wage at all. Instead of wages they are drawing unemployment money.
There are three factors affecting the iron and steel industry that my hon. and gallant Friend has alluded to. There is, first of all, the factor of foreign importations. The percentages are interesting, because, compared with 1924, the last year of the census of production, the volume of imports of foreign iron and steel has increased by 39 per cent. and the volume of our exports has decreased by 10 per cent. Those free importers who think that situation is very satisfactory to the users of raw products, such as the engineering industry, might perhaps explain how it is that over the same period imports of machinery into this country have increased by 81 per cent. and exports only by 10 per cent. The Chancellor of the Exchequer has told us that foreign imports are an admirable way of providing work for British workpeople, but that contention is not borne out by the experience of the iron and steel industry. The wages paid abroad are, on
the average, something like half the wages paid here. In Czechoslovakia and Belgium they are less than half.
What is the solution? How are Members sitting for constituencies interested in iron and steel going to get their men back to the work in which they were trained? I understand the solution of the President of the Board of Trade is reorganisation, on the ground that there has been inefficiency—that has been exploded—and on the general ground that he can think of nothing else to do— regional reorganisation presumably on the lines of the Coal Mines Bill. The right hon. Gentleman has great gifts, but he is rather like a man in one of Disraeli's novels who was described as a charming person with only one idea and that was wrong. If it comes to a question of organisation, Members sitting for constituencies interested in iron and steel know perfectly well that those concerns are far better organised than ever the coal industry was. They have, no doubt, read the Balfour report. I remember the sentence that says:
Two outstanding things we discovered. The first was that vertical combination has made a very large spread in the industry. Figures show that pig iron producers own 70 per cent. of their ore supplies and 60 per cent. of their coal supplies and the associations for regulating prices and outputs spread over practically every branch of the industry subsequent to the production of pig iron and ingot steel.
That was four years ago. There is no reason to think that industry has been less backward in reorganising itself since then. When we come down to a consideration of the facts, it is not sufficient to make a case against the iron and steel industry by saying that at the present moment it is badly organised, and that its troubles are due to bad organisation. There are any number of associations connected with the industry—Scottish Steel Makers' Associations, English and Scottish Steel Founders, and others. The position to-day is that we have got so far that four firms produce 40 per cent. of our total output of pig iron. Four firms alone produce 40 per cent. of our total output of steel. Half of the output of steel is produced by seven firms, and half of the output of pig iron is produced by eight firms. It may be in the mind of the President of the Board of Trade to have 100 per cent. trustification, and, if so, I very much doubt
whether the consumers will be as happy about it as he may be. If a solution is going to be sought by reorganisation, there is not much more to do, and it will not remedy entirely the difficulties from which the industry is suffering to-day.
How do hon. Members opposite propose to deal with the 3,000,000 tons of foreign steel which comes into this country every year? What reorganisation is going to stop it? How are they going to answer their constituents when they see shiploads of this stuff arriving, and find out at what cost it has been produced? The Coal Mines Act is a different proposition, but I wonder what modifications would have been necessary if the President of the Board of Trade had been faced year after year by millions of tons of foreign coal produced at prices below those against which we can compete? I wonder how far that would have changed the working of the Coal Mines Act. My third observation on the proposal of the President of the Board of Trade for reorganisation is: What is the object of reorganisation? What was the object of the Coal Mines Bill? To get a better price for coal. The object of the reorganisation of the iron and steel industry is, presumably, to get a better price for iron and steel. The iron and steel workers have as much right to consideration in regard to that matter as the coal miners. We were told that it was not right that the consumer should batten on the coal miner and buy the product of his hands below the cost of production.
The same thing applies to iron and steel works. If it is a question of reducing real wages by increasing the price of the commodity, in what way is the protection given to the coal miner by the Coal Mines Act different from the protection which many of us, I believe most of us, desire to give to the iron and steel worker. If the price of coal is increased, as it must be, by the operation of the Coal Mines Act, is not that an attack, a sinister attack, on the real wages of the community? If not, why is the assumed possible increase in the price of iron and steel under a tariff, which I do not for one minute admit, in any way an attack upon the wages of the community, or a reduction of their wages? If the Parliamentary Secretary
to the Board of Trade will explain that matter to me, I shall be very grateful to him, for at present it is rather a mystery. I do not believe that any reorganisation of the iron and steel industry is going to cure the major problems with which it is faced.
The President of the Board of Trade told the House on Monday that the leaders of the iron and steel industry would not be content with the 33 per cent. tariff of the Safeguarding Duties. Well, let him try it. I believe that if 'he were to offer it it might be accepted as a remarkably attractive gesture. He says that they want prohibitive tariffs. My recollection of the Socialist gospel is that Socialists themselves prefer prohibition of imports to a tariff upon imports, and it may be that the leaders of the iron and steel industry, having that in mind, would prefer to make a request to the President of the Board of Trade more in keeping with the policy of his party as far as it is known on that subject.
The proposal for reorganisation is really futile. How long would it take? We should have to have another Royal Commission, and days, months, and years would go by. The matter is desperately urgent. How many more men are going to be out of work- by Christmas? There are over one-third of them out now, and there will be half of them out by Christmas. We cannot wait for Royal Commissions, investigations and reorganisations. We want something done. The importer may go on for a time buying his cheap -foreign products, but -one day the manufacturers from whom he buys them will not be selling them under coot price, but will extort the uttermost farthing. There are thousands of iron and steel workers struggling frantically to maintain their livelihood, and yet here the Government sit worshipping at the shrine of the sainted Cobden, chanting the monotonous dogmas of the free importers, and sacrificing thousands of our fellow citizens on the altar of an antiquated and fossilised creed.

Miss WILKINSON: My excuse for entering into this debate at all is that, with my colleague from Middlesbrough, I represent one of the heaviest iron and steel producing areas in this country. There the unemployment has become so acute and it has risen so rapidly in recent months that I could not let this
debate go by without saying something about it. I should like to pay my tribute to the spirit and general attitude to this question of the Mover of the Motion. I feel that a speech made with such a real desire to keep clear of party cries is something which provides a very helpful contribution. I want to answer his main contention. He said that if this industry is taken over by the State to-morrow it will be faced with the same problems with which it is faced to-day. That, of course, is something with which every one on this side will agree, but we go on to the next point and say that, if this industry were taken over thy the State, or, as I prefer, reorganised nationally with the State as an active partner, the problem would be faced in a different spirit from that in which it is faced to-day. It really is extraordinary the way hon. Gentlemen on the other side of the House wave a hand, as both the mover and seconder did, and dismiss that proposition with the mere phrase, that obviously the socialisation of this industry is quite out of the question. And then nobody thinks about it any snore. But they go on to prove that see all agree how appallingly the capitalist organisation of this industry has failed. It really is amazing the way in which we agree that the something which has broken down so utterly is the competitive organisation of this industry, and then assume that it is absolutely necessary that that organisation 'should continue.
The Seconder of the Motion has said that it is not probable that reorganisation can go very much further. Perhaps that may be true with the industry constituted as it is at the present time. If the hon. Gentleman who moved this Motion would examine the proposals for national reorganisation in the same spirit in which he Made his speech to-day, I do not think that he would dismiss that matter with a phrase and think that the national reorganisation of the industry is really as impossible as he would have us believe. What is the position? There is a very great deal of competition. There is a very great deal of inefficiency. There are concerns which show a high standard of efficiency and compare with anything which any other country in the world can show. We have some of them in the area for which I speak. There are others
which are practically derelict concerns. The difficulty with regard to the reorganisation of this industry is the very necessary squeezing out of watered capital. Some firms have taken the plunge, and others have not. The result is, that there is a very great deal of doubt about this industry and a very great deal of difficulty in getting the necessary financial security for going ahead with the big reorganisation plans which are so very necessary.
Suppose that we get down to a real consideration of the position, and regard the iron and steel industry as one of those industries ready for national reorganisation and for taking over by the State, or, as I have said, with the State as an active partner. Let us assume that we have a national board representing the interests which are at present in the steel industry both of employers and workers, and the State. You would there have a national board not. dealing with a collection of pettifogging things, but, as the Seconder of the Motion has said, with an industry in which there were associations for regulating prices and output. Would it not, therefore, be possible for a national hoard to conduct negotiations with other countries both in regard to buying and selling on a national scale, with all the economies which comes from eliminating competition? How would that help? I submit to hon. Gentlemen on the other side who know, from practical experience, more of the iron and steel industry than I—and what I say now is what I have gained from a very careful study of the conditions in my constituency—that there is a great deal of waste, even in highly efficient concerns, owing to the fact that firms are only able to obtain parcels of orders after great competitive effort. They know that mills of a certain type. have to deal with a particular order, and that they then have to change over in order to deal with another order, with the consequent loss such procedure entails. I suggest that if you had a national .board and a reorganised industry on the basis of each particular set of mills most competent to do a particular class of work, you would, with big orders coming from a national centre, get an enormous advantage by keeping one set of mills specialising on one set of orders in a way which is not being done and can-
not be done, even if you have only seven firms doing 50 per cent. of the work.
The Seconder of the Motion asked: If you are going to have national reorganisation, how long will it take 4 He said that we could not have any more Royal Commissions. I suggest that if we were having another war the reorganisation of the iron and steel industry would take precisely three weeks or less. The whole difficulty is in getting Members of this House to face up to the fact that we are in a national emergency that very nearly amounts to the emergency of war, and that the stricken industries are becoming hopeless and helpless. A national board and a national industry would make a great deal of difference in dealing with the workers in the industry. I remember the ex-Prime Minister, when he was speaking of his negotiations with the coal miners, saying that when he was dealing with the Miners' Federation he had to deal with people who would not look at a matter purely as an economic matter because politics came in. Hon. and right hon. Members opposite, especially those who are overflowing with the milk of human kindness, forget that in these industries there is a suspicion that is deep down in the souls of the workmen. These men have had an awful time. They have known what it was to have rates cut, cut and cut. The record of strikes and disputes has cut right down into the souls of the men, and you will not and you cannot get them to make even necessary alterations in trade union rules so long as they feel that they are likely to be done in the end.
If we had a national board and if we had a feeling that there is going to be a straight deal and that the men are to be real partners in the industry we should get the whole atmosphere changed and the question of alterations of trade union rules etc. would be regarded as something that had to be considered. These men have made terrible sacrifices in regard to wages, sacrifices which they ought not to have been asked to make. It is all very well talking about the high rate of wages in the industry compared with other countries, but we have to bear in mind that there are many men who are getting only 37s. 6d. per week. There is something that the men will not give up and that is the right to protect what they have got. We have no right
to ask them to give it up unless they are in an industry which they feel is not being run merely for private profit and in which they are not regarded as a commodity to be thrown out when it is no longer necessary. All these questions, and even the question of Protection come into a very different category when you are dealing with a national industry instead of a private industry. I want us to keep our minds free to examine everything and anything that will help us out of our difficulties, but it will not be done and it cannot be done if industry as a whole and the community as a whole feel that we are subsidising one set of profit makers against another.
There is one thing that is very badly needed in the iron and steel industry, and that is a system of national advertising. We are far behind in the use of steel in this country, and we need to cultivate a steel mind on the part of our people who have the fixing and giving of orders. We want to get rid of the antiquated building restrictions which are preventing the use of steel. We know of a ridiculous case not far from this House where there is a large building which cost many thousands of pounds to build and where, because of the antiquated regulations of the London County Council, the top storey cannot be used. No one can suggest that it is not as safe as any other storey, but it does not happen to fit in with the special regulations which were framed with no idea of the use of steel in that building. If we had a national board, speaking on behalf of the whole industry, they could deal with public departments in a way that the individual steel manufacturer is not able to deal with them. I want a national advertising campaign which would cultivate the idea of the use of steel in all sorts of ways that are never thought of and where in future the use of steel would become a matter of course.
We must get rid of the system under which architects, decorators and furnishers cling to the idea that there is something sacred in the use of wood, and that steel is a thing with which only Bolshevists will have anything to do. Some new designs in steel furniture might well be considered by the steel trade. France is far in advance of us in the use of steel for home furniture and office
furniture. If one makes such a suggestion to the average steel manufacturer he takes the view that this is only an idea of a woman, and one is greeted with a superior air. I am sure that there would be a great future for steel in these directions if only we could get people to consider new ideas. One of the difficulties that we have in the iron and steel industry is that it is one of our oldest basic industries and there is a kind of aristocratic idea that you may advertise underwear and all sorts of other things but that the advertising of the great basic commodity of steel is quite out of the question. The bringing forward and development of new ideas could be done by the national board. The steel industry made a very great mistake when they linked up the idea of steel houses with the idea of a lower rate of wages for the workmen. People would not look at steel houses because it meant lower wages.
We must look for more markets for our steel. There is one country which very badly needs equipping by iron and steel products of every kind. That country is asking for credits which we have the means in this country to give but which, because of political prejudice, we will not give. I would point out to the ex-Prime Minister that here again political prejudice interferes with the situation. He told us that when he was dealing with the Miners' Federation he was dealing with people who would not look at economic facts because questions of politics came in. In regard to Russia we have exactly the same thing to contend with. People will not look at economic facts in regard to credits for Russia because the question of politics comes in. I was at a lunch before the Recess at which one of the most important men in the iron and steel industry, Sir Hugh Bell, made a speech in which he said that a great deal of the prosperity of this country and of the iron and steel industry during the 19th century was due to the fact that we supplied the credits to the United States of America to enable them to lay thousands and thousands of miles of railways. He pointed out that we had not suffered in this country by the increased prosperity of the United States, but had gained by it. So long as we have 100,000,000 of people in Russia—we might
add hundreds of millions of people in China and India—and all the consumer possibilities of those people are being kept out of our market by prejudice, we must have poverty as the result. I suggest to those connected with the iron and steel trade that they might do more to get credits for their industry with respect to Russia. Not one of the commercial credits to Russia has ever failed to be repaid, and as the amounts are repaid they could be used for the financing of further orders.
There is also the question of the shipping industry. I am in a position to know that in regard to my own constituency a credit of £2,000,000 for three years would provide work for 2,500 men. It would provide them with work in the building of certain ships that Russia are prepared to order. That would he real, beneficial employment, instead of putting men on to such jobs at tittivating roads that are already good. It would mean using these men at the job to which they had been trained. Unfortunately, while we are willing to vote unemployment benefit by the millions we are not prepared to settle down in this country and see what are the possibilities of improveing the iron and steel industry in the directions which I have indicated. I know that I am now treading on very dangerous ground, but if we had a national board and a national industry not only would there be better opportunities for dealing with the men and for dealing with foreign competitors, but we should have a very different attitude in this country with regard to tariffs. I would not dream of standing up against the idea of a tariff if a tariff was necessary for a national industry, but I would never support it if a tariff is going to be used to bolster up an industry which will not reorganise itself, or an industry which has not given the workers in the industry a fair deal.
All the problems and difficulties that we find ourselves up against in a basic trade like the iron and steel trade 'ire very largely due to psychological factors. We forget how much the psychological factor enters into the old suspicions and difficulties. We will keep down to the wrong idea that the only way to supply the needs of the communities is on a profit making competitive basis. Hon. Members opposite cannot dismiss all new
ideas with a mere wave of the hand and say that they are exploded theories. Far from being that, they are explosive theories and they are beginning to have very explosive effects in the minds of the working classes of this country and are taking a very real place in the minds of very large numbers of people. I suggest that gentlemen like the mover of the Resolution might give more consideration to the solution of some of these problems, because it is along those lines that this particular problem, which we all admit is overwhelming, can be met.

5.0 p.m.

Sir ROBERT ASKE: From all quarters of the House we sympathise with the object of the Motion and agree that anything that Parliament can do for the iron and steel trade without injury to the country as a whole or to any other branches of the industry, ought to be done. It is a little unfortunate that the mover of the Resolution did not set forth in the terms in which it is framed the real object which he desired to discuss. It is a little difficult to embark upon a discussion of the point of view which he indicated without having more time to investigate the matters with which he dealt. I did not gather that the hon. Member who seconded the Motion agreed with the project of the hon. Member who moved it, but from his concluding observations I gather that he considers that Safeguarding is the real remedy for the iron and steel trade. The hon. Member agrees; therefore, in the short time at my disposal I should like to indicate my view in regard to some of these matters.
So far as schemes for benefiting the iron and steel trade are concerned, the only practical measures before the country which Parliament can undertake are those which have been set forth in some detail by the party to which I have the honour to belong. Those schemes embody proposals which would give the greatest advantage to the iron and steel trades in the machinery which would be necessary for making roads, telephone extensions, bridge building, and a greater extension of housing; and in the agricultural schemes in the machinery arid implements which would be required. Those are practical proposals which would be of the greatest benefit to the industry. The proposal of the mover of this Motion boiled down amounts to a State grant-
in-aid of industry, based as I understand it in some measure upon output. The hon. Member did not indicate in much detail bow he proposes that this should be carried into practical effect, but it seems obvious that if the State is only to come to the aid of the inefficient branches of industry there is not much encouragement to embark on these proposals.
If any State aid is given it should be given to the efficient rather than to the inefficient, in order to enable industry to take advantage of its efficiency. It cannot be confined to any particular branch of industry. If it is extended to one it must be extended to all. It would have to be given to agriculture and shipping, to cotton and wool, and coal mining, and, indeed, to every branch of industry. If, on the other hand, the proposal is to confine it to those branches which are inefficient then it would necessitate an inquiry in every case as to the degree of inefficiency—an impossible proposition. One gets back to the idea that this is merely an attempt to re-introduce the old system of subsidising wages out of rates. Moreover, there is this important consideration to be remembered, that if it is to be based on the present state of unemployment it means that the subsidies will have to continue on the same basis, that is on the basis of over 2,000,000 unemployed; and these subsidies, which are supposed to be used in order to get men into work, would continue presumably even when men are in work because it is to be based on production. Consequently, we should be embarking upon perpetual subsidies to industry. There would be no dividing line as to where we should begin and where we should stop. It would mean that we should' establish the industries of this country, which up to the present time have subsisted' and flourished on their own unaided' basis, and impose them upon the State.
But a still greater argument appears to me to arise, and that is that it would be a serious deterrent to improvements. If a subsidy is given to any particular branch of industry which is not successful where is the urge upon those engaged in it to make it successful? What has made the industries of this country what they are has been the continual encouragement to develop by the energy
and enterprise of those engaged in them. One has to have regard to the situation in comparison with pre-War days. The present position of the iron and steel industry is not different in its essence to what it was time after time before the War. Even in the prosperous year of 1913 one found the same complaints from the iron and steel trade which exist at the present time. Starting at the bottom of the scale we find that last year there was a far less import of pig iron from foreign countries than in 1913. In 1913 we were importing enormous quantities of steel in a partly manufactured state, yet this country was never in a more prosperous condition than it was at that time. It induces one to look in other directions than the mere fact that there were these vast quantities of foreign steel coming into this country as an explanation of the condition of the iron and steel industry at the present time.
One has also to have some regard to the comparative position in the industry as it exists to-day. The industry as a whole is not nearly in such a deplorable conditions as has been indicated. Taking the whole of the trade, I find that we still have an export of £68,000,000 as against an import of only £24,000,000, and a total export of 4,380,000 tons as against a total import of only 2,800,000. If we take into account the character of the international trade, which after all is the most essential feature, we find that although we are importing considerable quantities of foreign iron and steel, yet what we are importing is the partly manufactured article which forms in itself the raw material so essential for those industries in this country which are the most prosperous, and which enables us by employing British labour upon them to make such a great part of the profit. of the nation. What we are doing is to import iron and steel of a character which employs more labour and exporting materials which employ a great amount of labour. That can be proved quite easily. The value per ton of imported iron and steel is less than £9, but the value per ton of exported iron and steel is £15; and if you exclude pig iron the value of imported iron and steel is only £9 per ton but the value of exported iron and steel is £17 per ton. There is a difference
in the one case of £6 per ton and in the other case a difference of £8 per ton, and the difference between the two carried over the total tonnage is no less than £16,000,000 per year. How is that £16,000,000 per year, which is the difference between the same tonnage imported and exported, made up? It is made up in the main in the wages paid to British workmen in working on the steel imported, which could not have been done but for the fact that the steel has been imported at a cheap price. As a matter of fact, the articles ready for sale imported into this country only amount to the small sum of £7,250,000 a year. In machinery, in tonnage, not in percentages, which in this case is a totally ineffective guide, we are exporting to-day five times as much as we import.
From these facts it appears that this country, compared with other countries of Europe and the United States of America, is maintaining its position in the world. There is one other point to which I must draw attention. Reference has been made to the total production of this country as compared with the year 1913. I am quoting now from the Statistical Abstract for the year 1928, and I find that in 1913 the production of steel by the processes in Great Britain was 7,600,000 tons, but in 1927 it 'was 9,000,000 tons and in 1928 8,500,000 tons, showing a great extension in the production of steel in this country up to 1928, the last date available, as compared with the year 1913. There is this further point. All these matters of comparison with one branch of industry and another involve very serious repercussions. The trade for which the hon. and gallant Member has spoken employs 200,000 men, but the branches of the iron and steel trade which are dependent upon iron and steel as their raw material employ directly over 1,500,000 men. It is therefore obvious that any measure which is undertaken, and which must have a reflex action upon all these dependent trades, must be scrutinised with the greatest care.
I have the honour to represent a constituency in which there is a trade which is the largest customer of the iron and steel trade, the shipbuilding and ship repairing industry—an area where practically all the workers, skilled or un-
skilled, all the tradespeople and all the professional people, are dependent upon these industries. Therefore, one has to be keenly jealous that nothing shall be done with regard to the raw materials which we want for this great and basic industry, and that one of the industries which has made this country famous shall not be jeopardised in any way. One also has to consider, in every one of these matters, the position of shipping. The amount which this country derives, as part of its national income, from shipping, is no less than £120,000,000 a year, which goes to purchase a large part of the food and the comforts and the luxuries which we enjoy and which we could not obtain without it. Everything that tends either to reduce our exports or to reduce our imports cuts into that source of national income, and those who speak so freely about reducing our imports are striking a direct blow at a source of national income which is so substantial. Since every import necessarily involves a corresponding export, because our foreign customers cannot afford to buy from us unless we buy from them, one sees that any interference with national trade cuts down directly a large part of our national income. That is a matter which is often forgotten in discussions regarding interference with our national trade.
Looking at the matter from the point of view of the shipbuilding and ship repairing industries, I would repeat that we want iron and steel at the cheapest price, and that we can live only if we can buy cheaply. Why do we buy foreign steel? Because we want it, because it is particularly suited to the requirements of the moment or because it is cheap. If we cannot get it at that price, we are unable to obtain contracts from foreign owners. Any interference with that is a denial of the rights of industrialists to buy in the cheapest market, which has always been one of the principles upon which British industry has been built. I regard with great apprehension the suggestion of the hon. Gentleman who seconded the Resolution, which was to the effect that there should be a restriction on the import of foreign materials—which, of course, necessarily tends to increase the price. If the price is not going to increase it is not much use to the industry.
The shipbuilding industry, which uses so much of the steel, both that produced at home and that imported from abroad, is in the direst straits. It is able to survive only with the greatest difficulty. During the last five or six years a great number of the contracts which have been obtained have been obtained only at cost of production or less in order to preserve the organisation of the yards. We are no longer in the predominant position in shipbuilding in which we were before the War. The increased efficiency of foreign yards and shipbuilders, coupled with their cheaper labour, has rendered it increasingly difficult for British shipbuilding to maintain its position. It is true that we still build practically all our own ships, which is a great tribute to the designing of British draughtsmen and to the efficiency of our workmen. But at the present time we are building for the United Kingdom only 668,000 tons and for foreign owners 450,000 tons, or a total of 1,100,000 tons, whereas foreign yards.—there are now 17 countries besides ours which are building ships—are together building no less than 1,400,000 tons Therefore at the present time we are not building half the tonnage of the world.
Taking marine engines, we are building only one-third of the engines under construction. In a great many recent public inquiries it has been made manifest by shipbuilders that it is only by getting cheap raw material that they have been able to keep their yards open. I contend that we as customers of the iron and steel trade are, if anything, entitled to more consideration than is the seller of our raw materials. It is more logical to give a stimulus to shipbuilding than to the production of the raw materials. If we, being the customers, are deprived of these cheap materials, there is a direct repercussion on the iron and steel trade itself. If you can in any way stimulate the building of ships you by that means necessarily give a stimulus, to the iron and steel trade. We have our unemployment. The unemployment in the shipbuilding and the ship repairing trade is 38 per cent. That is as much as in any other branch of the iron and steel trade. In marine engineering there is unemployment of 24 per cent. This trade is one of the depressed trades of the country, and I want to urge upon the House that with that state of affairs
and with a great industry of this kind employing more men than does the iron and steel trade, it is futile to talk about benefiting one industry at the expense of a greater industry. Exactly the same consideration applies to the other higher branches of iron and steel manufacture. If. one takes the tinplate trade of South Wales one finds that it has been able to survive only by reason of getting cheap material. One finds in the report of the Balfour Committee this passage:
The possibility of obtaining cheap foreign steel clearly benefited some branches of the industry, for instance the re-rolling section and the tinplate and galvanised steel industries, and it was in some cases an important factor in enabling them to maintain and increase their export trade. The evidence of British manufacturers was to the effect that South Wales was making tin plates, from steel to the finished product, cheaper than any country in the world.
The tinplate trade has expanded enormously since 1913. It has gone through its depressed period since the War, but the great efforts which were made in South Wales in reorganising the industry has enabled it to pull up, and the trade is in a better position than that which it occupied in pre-War days. That is a practical illustration of what can be done by reorganisation if those engaged in a trade are determined to make it prosperous. The same arguments apply entirely to the general engineering trade, which is again dependent upon the iron and steel trade, and to all the metal trades, such as those of Sheffield and Birmingham. Of course all these trades, in all their different gradations, in the evolutions of steel from its rawest form to its final state of manufacture, no doubt would all wish to have some kind of protection against competition. But one finds that every one of these stages is intensely anxious that there should be no protection at the stage below. They all want raw material at the cheapest price, all want the products which are made by those engaged in other stages of manufacture to be at the cheapest price, and they all want their products to be sold at the highest price. That is only human nature:
I would like to mention another feature with regard to the iron and steel trades. If one again takes 1913 as the basis of comparison, our imports last year were up by £9,000,000 and our exports, were
up by £14,000,000. If we include also machinery, electrical apparatus and vehicles made of steel, we find that our imports were up £28,000,000 and our exports were up £78,000,000. In 1913 in these classes we exported £78,000,000 more than we imported. In 1929 we exported £128,000,000 more. These figures lead to the conclusion that, although you may have great depression in some branches of the industry, nevertheless the production at cheap prices of raw material enables the industry to prosper. No doubt envious eyes are cast upon Germany. There is the report to which an hon. Member referred.
It appears, however, that the metal industries in Germany wholly unemployed or on short time have over 30 per cent. of their workers unemployed. The machine industry is slacker than for many years and is only employed to 60 per cent, of its capacity.
A general conclusion of great importance is to be found on page 33 of the report —that in the difficulties confronting the post-War position of the iron and steel industry there is a marked similarity between Germany and Great Britain. That conclusion which, of course, is quite impartial is of great importance for this reason. Here is one country based on Protection and another country based on Free Trade and yet one finds the same conditions prevailing in both countries. That seems to indicate that no proposal for revising the position of this country as regards tariffs could alter the dominant features of the situation. There is this greater consideration which I would mention in, reply to the Seconder of the Motion. If we begin to interfere with the free flow of exports from those on the Continent with whom we deal, we must expect retaliatory measures from them.
This country makes an enormous profit by reason of its export trade. If we attempt to interfere with the import trade which we carry on with Continental countries, we must expect them to interfere still more drastically with our export' trade. In other word's, we shall gain nothing by any measure of that kind. I have ventured to put before the House the point of view of the higher branches. of the iron and steel trade, as distinct' from that of the lower and basic portions of. the trade to which the Mover of the Motion alluded. I submit, that if, we attempt to undermine, even in a small
degree, the foundations of the industry, that is to say the supply of raw material for all the higher branches, we are going to prejudice the stability of the whole industrial fabric of the country. It has taken a lot of building up, but what has taken generations to build can be destroyed in a year or two by inexpedient measures. Bad as the position is, and we all deplore it, nevertheless we have to be careful that we do not, by ill-considered measures, make much worse what is already bad enough.

Mr. WALKER: I welcome this Motion because it gives the House an opportunity of discussing the present very parlous condition of one of the basic industries of the country. I suppose it was inevitable that the King Charles' head of the fiscal controversy would be brought into this discussion. The Motion itself deals with the position of the trade but the debate had not proceeded very far until we were once again into the old arguments as to Protection and Free Trade. We had a classic exponent of the virtues of Safeguarding and Protection and we had an equally splendid exponent of Free Trade replying from the Liberal benches. But I think we must go a bit further than either of those things. I can well imagine that the hon. Member for East Newcastle (Sir R. Aske) who looks with evident horror upon any interference with cheap materials coming into this country, would probably look with the same horror upon any interference with cheap labour coming into industry. But he has to face the logic of the situation as it presents itself to the whole country. We may say that we do not believe in Protection and yet the very theory which we are arguing is the theory of protecting the consumer, while the other man is arguing for the theory of protecting the producer.
Somewhere between those two points of view there ought to be a solution for the difficulties of an industry which has been foremost among the iron and steel industries of the world. Great Britain led the way in this industry, so that those engaged in it are not now trying to establish something which is not congenial to this country or is economically unsound. We are dealing with an industry which has been long established here and which enabled that great shipbuilding industry,
to which the hon. Member for East Newcastle belongs, to be built up in this country. A year ago I welcomed the appointment of a Royal Commission to deal with this industry and this afternoon I wish to deal with the position which has arisen since. We have had that Royal Commission, but we have not yet been supplied by the Government with its findings. Only one part of the report has been published and I cannot understand why this should be so, unless it is to supply material for our friends who worship not at the shrine of Cobden but at the shrine of Joseph Chamberlain.
All that that part of the report did was to deal with the wages position on the Continent. It gave us the wages rates quoted by the hon. and gallant Member for King's Norton (Major Thomas) and the hon. Member for Lancaster (Mr. Ramsbotham). They tried to show that the existence of these rates was the reason for the trouble in which the British steel trade finds itself. But the hon. and gallant Member for King's Norton, who is connected with the trade, knows that wage rates are no indication on the face of them of labour costs. It would be very difficult indeed for me, and I am connected with the iron and steel industry in this country, to get from the employers here a statement of labour costs; and if it is difficult to get such a statement here, how much more difficult is it to get labour costs in foreign countries where this Commission carried out its inquiries into wage conditions. They have not given any comparisons, and probably there is something else which has to be taken into consideration in connection with this matter.
I should like to know from the Government what were the recommendations presented to the iron and steel industry. It is a strange thing that those recommendations are unknown to the public of this country but they can be read in the "Cologne Gazette." They can be published in a foreign country but not in this country. I wish to know from the Government: do those recommendations contain anything which is going to be of benefit to the industry, and have the steel trade employers refused to carry out those recommendations? If so, this 'House and the country ought to
know. After all employers and owners of capital in any industry are only trustees for the nation. They are not the sole arbiters as to what is to occur in the trade. If the Government have met with a point-blank refusal from the iron and steel trade employers to carry out those recommendations, then I think, if they come to the House of Commons, they will get full support in compelling those people to carry out recommendations which will be of benefit to the trade.

Major COLVILLE: Has the hon. Member any reasons for believing that that is the case? Has he anything at all to go upon in making that statement?

Mr. WALKER: If the hon. and gallant Member were listening to me carefully he would know that I am at this moment inquiring about it.

Major COLVILLE: That is what we are all doing.

Mr. WALKER: I am asking if those recommendations have been made and if the employers have refused to accept them. I want an answer to that question because it is of vital importance to those engaged in the industry to know exactly what the conclusions were and whether they have been accepted or not. We had an industry dealt with in this House which has some relation with the iron and steel industry because it supplies materials to that industry. It was dealt with by the Government in spite of active opposition from those who controlled it on the employers' side. The Government compelled them to organise and to set up marketing machinery. But the great difficulty in connection with that industry, and one which the Government had to face all the time, was the question of the relationship between the men and the owners. I submit that no such difficulty exists in the iron and steel industry. There, the relationship between workmen and employers has been one of business negotiation for more than 40 years, with very little dislocation of trade at any time, amicable arrangements being arrived at in almost all cases. It is not because the employers in that industry are more generous than they are in other industries or because the employes are not just as good fighters as those in other industries. It is because there happens to be in the industry an
instinct for business settlements, which has always brought about a solution of any question which arose.
Because of the existence of that relationship, because of the fact that wages in the industry are based on the price obtained by the employer for his goods, every fall in price owing to world competition is reflected immediately in a fall in wages. There have been no dislocations or disputes but there have been automatic reductions all the time, until, to-day, those engaged in the trade are working for less than half the wages which they received in 1920. That state of affairs ought to mean that one difficulty is out of the way in reference to this industry and I want to know from the Government whether they have considered—and on our side we believe this —that reorganisation in the industry ought to take place alongside greater national control of the industry. The hon. Member for East Middlesbrough (Miss Wilkinson) referred to the question of a national board. What we want is a national board which will control the industry in its development, and decide exactly where capital is going to be spent for development purposes in order to prevent it being spent in wrong places and in places where, to-day, because of adverse conditions, it is impossible to produce steel at a price which can meet any kind of competition.
There are cases in Scotland where pig iron is being produced on one side of a river and sent 20 miles away to a steel works although there is a steel works on the other side of the river a quarter of a' mile distant. The ironworks and the steel works belong to different companies. That is the kind of thing which has existed in the trade. Hon. Members will say, and it is true, that during the past few years that has been disappearing, but that is what is happening in the trade at the moment. Rationalisation is being applied on a very intensive scale inside the iron and steel industry, and that, of course, is something that the hon. Member for East Newcastle-upon-Tyne would say is the proper thing to do. But while you are doing that, you are laying some town or some village derelict, with all the people who have built up all their interests there. For them, everything is hound up in the works that have been planted there, in
some cases during the War in order to help the country in its hour of difficulty. Now those works are closed down, and nothing is being done, apart from the dole, in order to meet the cases of very great hardship that exist, but which can find no sympathy under the theory of laissez faire and not interfering with industry lest we do something to hurt the price of raw material.
We want a national board for the purpose of controlling all that, and I would remind the hon. Member for East Newcastle-upon-Tyne that when he is talking about the extra output of steel now as compared with 1913, we now have a capacity for 12,000,000 tons production, whereas in 1913 we had nothing like that. We had then a capacity for less than 8,000,000 tons, and were producing something like 7,600,000 tons, according to his own figures. This year will show very much lower figures than the 8,500,000 tons that he quoted. But we have our 12,000,000 capacity in the country, and some of the finest steel plants in the world. I have seen them in Germany and America, and I know that we have plants here equal to anything that they have in other countries.
I want that national board to deal with this question of development inside the industry, and I want—and perhaps this is where I shall quarrel with the hon. Member for East Newcastleupon-Tyne—an imports and exports board. I want a board connected with the industry, under the control of the nation, to deal with the imports and exports in order to try to get some proper values and relations there, so that later on we shall not be placed at a disadvantage. I quite agree with the hon. Member when he says that they have developed the tin plate trade. That trade is doing well, and the tin plate maker is making very large profits, and could perhaps afford to pay a little more for his raw materials than he is paying.
With regard to dumping, there is no question at all that they are selling those bars in South Wales at a very much lower price than they are selling them in their own country, and they are not doing that for the love of Great Britain. They are doing it with some set purpose, and if we can send that stuff away and get money for it, it may be used for the
purpose, as it is being used in certain quarters, of putting down tin mills for competing with the Welsh tinplate maker. If the Welsh tinplate maker can make the cheapest tinplates in the world because of his cheap raw material, surely other people who are supplying him with that cheap raw material can make those cheap tinplates as well, and menace him at another end. Would it not be far better for him to try, in co-operation with the whole industry, to establish conditions whereby they would get cheap raw 'materials, but get it inside the country, in order to prevent that menace coming along later on, which otherwise it is sure to do?
Only during the present year, what has happened so far as Australia is concerned They have told the sheet maker that there are to be no sheets going into Australia, and the people who sent those sheets out there have had to close down their works. There is no argument in the matter; they cannot discuss it. But a national imports and exports board would be able to negotiate with the people who are doing that kind of thing in other countries, and regulate the imports and exports into and out of this country. Unless we get things done in a businesslike way in our industries, we shall have difficulty all the time.
I do not blame the present crisis in the iron and steel industry as being something peculiar to that industry. You cannot divorce the iron and steel industry in its depressed state from the depressed state of all the other industries in the world which are exporting industries, because it is the exporting industries of the world in all the countries that are in a depressed state. All your home industries, your sheltered industries, are in a very much better position, but those exporting industries are in a position that is due, not to little causes inside any country, but to large world economic causes, which ought to have been dealt with in the debate on trade depression that took place on the King's Speech. But we can prevent things happening in particular industries if we get a businesslike method of doing it, and I want to know if there was any such recommendation in the committee's inquiry as an imports and exports board.
I want to know also if they are facing this situation: We have a capacity for delivery of over 12,000,000 tons. Have
they visualised the production of, say, 10,000,000 tons, and the labour necessary for that amount, and that the industry should be based upon 10,000,000 tons and should carry a proportion of reserve labour over and above, between the amount of 10,000,000 and 12,000,000 tons? It is no good sitting down and saying, "Thus far and no farther," and that 9,000,000 or 10,000,000 tons is sufficient. We ought to be aiming at something very much higher, because the use of steel in the world is still in its infancy, and it can be developed very much more.
We in the industry are taking steps from the point of view of propaganda, as has been mentioned. An organisation exists already which is spreading propaganda throughout the country on the use of steel. These things are being done, and rationalisation is taking place, but money is required in the industry. I do not say to the Government, "Give them money ad lib." I would not give anyone money ad lib, but I say, "Give them money under certain conditions," in order to enable them to put down plant where it is necessary to compete against the foreign competition which is sending here cheap bars and other things which could be produced here, if only the trade bad the necessary financial assistance in order to put down equipment and plant.
In Germany, in the Ruhr district, coal pits have coke ovens alongside, which are producing gas. If you put up coke oven plants here next to coal pits, you are bound to lose the gas, but it is getting clear in Germany and sent along pipes. Works are tapping those pipes and taking out so much gas, and town-ships are taking it, too. It would be quite possible for something to be done here in an industrial area whereby we should be producing from our coal the coke for blast furnaces, with the waste gas selling to our townships instead of selling them coal to take into gas works in order to make gas at a very much higher price than that at which it could be produced under such a system. That would enable us to get cheap pig iron and steel and, by getting those cheaper steels, 'would enable my hon. Friend the Member for East Newcastle-upon-Tyne to build even cheaper ships to sell to the rest of the world.
Industry wants to be correlated in that way, and I want to know if the Government in their report had any of those things to suggest and, if they suggested them to the steel and iron employers, whether those employers rejected them as being of no use. I want to know from the Government why the report was not published in its entirety, why only a part was published, which dealt with labour conditions, why the other part, which dealt with the much wider aspect of the trade, has not yet been published, and why so far we have been unable to get any promise that it will be published in the very near future.

Sir NEWTON MOORE: In common with a good many other hon. Members, I should like to congratulate the hon. Member for Newport (Mr. Walker), who has just resumed his seat, on his very practical remarks with regard to the iron and steel industry. Unlike the hon. Member for East Middlesbrough (Miss Wilkinson) I cannot claim a right to take part in this discussion as representing an industry in my constituency, but I feel that it gives an opportunity for all those of us who have had some experience here and in other parts of the world to pool our ideas, so that we may come to some conclusion as to what can be done to rehabilitate this great basic industry.
As the hon. Member for Newport has said, this is the home of the steel industry, and there is no reason why it could not be materially developed. We are indebted to him for the rather astounding fact that he has made known that there has been a report made to the Cabinet which has never been made available in this country but which has been published in a Cologne newspaper. I endeavoured to obtain some information with regard to that report in the legitimate way by putting a question in this House, but I was ruled out of order, and the question was not allowed to go forward. I hope, after the remarks of the last speaker, that the Government representative, in replying, will give us some idea of what was contained in that report.
I was glad he took the opportunity of informing the hon. Member for East Middlesbrough that, in so far as the steel industry is concerned, she is in error and that there have been practically no disputes in that industry for the last 30
years. In fact, the best of relations have existed, and that old veteran in the industry, Mr. John Hodge, has always been able to confer with the proprietors without giving away anything on the side of the men, and has been able to make good agreements, which have lasted over a considerable number of years.
6.0 p.m.
It must be recognised by everyone here that the industry in this country is now in a parlous condition, though some of the supplementary industries are active, and the electrical industry is fairly holding its own, in so far as domestic requirements are concerned, but we realise that in the heavy machinery those great orders which were predicted last year have not eventuated. Mr. Charles Schwab, who was over here quite recently at a steel meeting—and who, as hon. Members may know, is President of the Bethlehem Steel Company and of the Iron and Steel Institute of America, and came over here to receive the Bessemer medal from the Iron and Steel Institute of this country in recognition of the part he has played in connection with this industry—in the course of his remarks pointed out that there was not a development in connection with the steel industry that had taken place in any part of the world which had not had its origin in this country. The Bessemer process, the open hearth process, all, had originated here and been developed and improved in Germany and America. He pointed out that this was the homeland of the steel industry, and he said it seemed, in his judgment, ridiculous that from 3,000,000 to 4,000,000 tons of steel should be imported into this country annually. He could not understand for a moment why people of this country could sit down and allow that amount of steel to be imported. The steel industry has been constantly urged to put its house in order, but it must be remembered that foreign material has been sold in this country at less than pre-War prices, and every Continental manufacture in search of a market finds this country the best field for dumping his production and so keeping his hands in employment. We on the other hand, are busy with transference schemes, endeavouring to make good miners and steel workers into navvies on the roads, rather than keeping them on their own specialist jobs. We
have to realise that every ton of steel imported displaces 3½ tons of coal. British steel, on which the commercial supremacy of this country was founded, has remained static for a long period, while our Continental friends have taken advantage of the position and are operating on a much lower scale of wages. The hon. Member for East Middlesbrough made a suggestion which is well worth considering. It was in regard to the substitution of steel for the foreign timber which is being imported. An intimation appears in the papers to-day that hundreds of thousands of timber doors from Russia are being dumped into this country, and the hon. Member wisely asks why something cannot be done by the Government to enable steel to be substituted for wood in our houses in the way of steel frames, doors, and so on. I do not see why the subsidy on houses should go to the benefit of the foreigner.
In the reorganisation which has recently taken place in Germany, the various buying and selling departments were organised under one control. A good deal could be done in that way in this country. In buying ore in Germany, all the works get together and make their contracts with the Sweden or with Bell Island, Newfoundland, for a long term of years. What happens in this country is a contrast to that which takes place in Germany, for the works in this country buy small consignments, say, of 10,000 or 20,000 tons at a time. By buying wholesale, the German works help the development of cheap production. Again, take the terminal facilities provided in this country; they are absolutely obsolete, and are not to be compared with those in Rotterdam, Amsterdam, Boston, Sydney, Nova Scotia. In Bell Island a 12,000-ton ore steamer can load in six hours, and can be discharged at Sydney in six hours, in Boston in 1½ days, and in Rotterdam front 24 to 36 hours. In this country, there are few ports in which such a vessel can unload. Most of the ore supplied in this country is procured from Sweden, Norway and Spain, and is generally brought here in very small vessels. The larger vessels draw too much water to be able to get into many of our ports, and, when they do get into the larger ports, they unload at the rate of only 1,000 tons a day. The ordinary demurrage charged on vessels of 10,000 tons and
over is approximately £80 per day. This would mean, say, £800, or about is. 7d. per ton on the ore imported, which would have an iron content generally of approximately 50 per cent.; consequently, it would take two tons of ore to make one ton of steel, and it follows that the price of steel would be increased by 3s. 2d. per ton. Cannot something be done to improve the terminal facilities for shipping? The same applies to the coal trade, where the same necessity-exists for materially reducing the costs of handling. Although I have more than once raised this question in the House, very little has been done up to the present to bring these facilities up to date.
We must realise that we are importing too much coal into this country, that is, coal through the medium of steel. We want to export more coal from this country through the medium of steel. I am satisfied that there is a degree of unanimity in regard to the desirability of some inquiry or some effort being made. This industry must go ahead. There is every condition surrounding it that could make for its success. We have lost many markets, and many of the overseas Dominions are establishing their own steel works, so we must look to our own home markets to take the place of the exports which we have lost. Australia used to take from 150,000 to 170.000 tons a year from us, and now she has her own mines, her own coal and limestone quarries, and established her own steel works. The same applies to India; as a result of the political boycott, little steel is being bought in this country, and the heavy orders have been transferred to Belgium and other places. As we have lost these markets, why should we not make provision now for the production in this country of another 3,500,000 tons, which, in addition to providing work for the men in the trade, would also employ 20,000 miners and give employment to the railways and all the other trades dependent on the industry

Mr. STRACHEY: When a Motion of this sort is moved, Members on this side of the House have to make up their mind whether they will approach the question of the regulation of a great industry like the steel industry on its merits, or whether they will adopt the pure milk of
the gospel of laissez faire—of Free Trade —of which we had a fine exposition given to us by the hon. Member for East Newcastle (Sir R. Aske) just now. His lesson was perfectly clear. He said that steel cannot be too cheap; if the British steel industry cannot produce steel cheaply enough and the steel users of this country-have to import it from the Continent, then so much the worse for the steel industry in this country, which must simply gradually go out of business. He was perfectly clear, and regarded the interest of the steel users, shipbuilders, engineering industry, and other users of steel in this country as paramount. He thought that any disparity which there might be in wages or conditions between the steel industry here and die rest of the world was no concern of us in this House, and that we must simply allow the free play of economic forces to decide whether we are to have a steel industry in this country at all.
That point of view is to me very attractive. I was brought up in the strictest tenets of that gospel; it is logical and clear cut, and we ought to feel its force; but, despite the expositions of it to which we are treated from our Front Bench very often, I feel a certain embarrassment in adhering to that doctrine at the present moment after the work of the last Session, which was so largely occupied by passing a Bill for (he regulation of another great industry, that of coal. In that Bill, we definitely departed from the view that a great commodity cannot be too cheap. We settled definitely, whether rightly or wrongly—I think rightly—that coal could be too cheap. We were told in many eloquent speeches from the President of the Board of Trade and the Prime Minister that the price of coal must not be allowed to fall below a point at which a decent wage could be paid to the miners. How are we to adopt that point of view in the matter of coal, and say that the price of coal has to be kept on a level compatible with decent wages to the miners, and adopt a precisely contrary attitude in the case of steel? It seems to me impossible to yield to the Miners' Federation of Great Britain what we refuse to the Steel Confederation. That produces a position of complete chaos in our economic outlook.
Therefore, I confidently believe that we shall adhere to the attitude of this party, in contrast to that of the party below the Gangway, which has never
taken the view that interference with so-called economic laws was in itself a sin or a crime, and that therefore it must look at the question of the regulation and control, and if necessary the protection, of a great industry such as this on its merits. Having said that, it seems to me that we must begin to look at the case on its merits. That does not mean that we shall inevitably find that the merits of protection by tariffs in the ordinary way—which have been pressed on us so vigorously from the opposite benches—are conclusive. Those who have listened to the speeches to-day will have felt that the case for the protection of the steel industry by the ordinary old-fashioned method of a general tariff is very weak. The hon. Member who moved this Motion must have felt that, because he was very far from addressing his appeal to the House on that case alone.
Those who advocate tariffs in the steel industry are somewhat in a dilemma. They must be advocating either a high tariff or a low tariff. Let us suppose that they advocate a low tariff. They are not complaining that the competition is from a foreign industry which is slightly more efficient, and which is therefore able to send in steel at slightly lower prices. That is not their contention at all. They tell us that our industry is equally efficient, but that the foreign steel producer, for purposes of his own, is dumping steel into this country at a price which bears no particular relation to his own cost of production. We have that view affirmed by the hon. Member for Newport (Mr. Walker) who spoke on behalf of the men's organisation in the industry. If this is the menace which they have to face they will agree that no low tariff will have any great effect one way or the other. If it is a case of dumping, if the foreign steel producer is putting steel into this country in order to build up balances, or for any reason of his own, without regard to his own cost of production, no low import tariff will possibly deter a great producers' organisation like the Continental Steel Cartel from pursuing that policy. So I do not imagine that it can be a low tariff which hon. Members have in mind.
Then we come to the alternative of a high, an almost prohibitive, tariff. I hope we shall hear from someone connected with the steel industry whether
they do actually ask the House to pass a high, an almost prohibitive, tariff on the import of steel into this country without any reorganisation of the industry or any other measures—just a simple measure of Tariff Reform. There are vast industrial interests. which have spokesmen in all quarters of the House, which would regard such a prospect with no equanimity. To pass a prohibitive tariff on all kinds of steel without any conditions, without any plan, would surely be to hand over vastly important interests in this country, such as shipbuilding, engineering, the motor car industry, all kinds of industries employing millions of men, the greatest industries in this country, and the only exporting industries which are making headway to-day in the world—to hand them over gagged and bound to the steel masters of this country. Surely, therefore, ordinary Protection by either a low tariff or a high prohibitive tariff would impose serious difficulties which even the steel producers themselves must recognise.
Again, what part of the product of the steel industry are we to protect by tariff? There are all sort of grades in the range of products from pig iron to the highly finished article. Are we to be told that we are to keep out foreign pig iron? That is quite a possibility, no doubt, by a tariff. In that case, the British manufacturers who work up pig iron into semi-finished steel will presumably have to pay more for their British pig iron than they would for foreign pig iron. That must increase the cost of the semi-finished article, and to that extent reduce their opportunities of competing with semi-finished articles produced abroad, and there will be an increasing inflow of Continental semi-finished steel. We shall only have kept out pig iron in order to bring in a greater quantity of semi-finished steel, because the complaint most frequently heard is of the disparity between labour costs here and abroad, and the proportion of labour costs in the manufacture of semi-finished steel is very much larger than in the case of pig iron and, accordingly, the competition will become more severe. If that is the case, the only thing to do will be to clap on a higher tariff still upon the range of semi-finished steel goods and keep those out. In that case the British industries using
British pig iron and British semi-finished steel will feel the force of foreign competition in their products, and they will feel it all the more because in the case of the finished article the element of labour costs in which there is the disparity complained of is even higher.
I am only bringing up these examples because they seem to show what many hon. Members know better than me, the impossibility of applying any direct simple tariff remedy to this extremely complicated situation. We often hear far more eloquent and more powerful destructions of the simple tariff arguments than I have given to-day from, among others, the President of the Board of Trade, but at the end of them, however conclusive they may be, we seem apt to go away unsatisfied. For while tariffs may be confidently predicted to produce all these unfortunate results, yet Free Trade is quite certainly producing most unfortunate results here and now, and therefore it is not possible for us to leave the matter there. Surely a position has been reached in this industry, as in other industries, where something, some move, some executive action on the part of the Government and on the part of this House is absolutely necessary. No economic exposition, however subtle and however conclusive, can possibly free the Government and the House from that responsibility.
We have had constructive suggestions during this debate. We had suggestions from the hon. Lady the Member for East Middlesbrough (Miss Wilkinson) and the hon. Member for Newport of some kind of reorganisation of the steel industry. I do not think it was evident to-day, but sometimes there has been a tendency for hon. Members opposite, representing the employing side of the steel industry, rather to brush that argument aside, and to suggest that that is merely toying with the question; to say that the industry is about as efficient as it could be, and that there is nothing much in the idea of reorganisation. I would like to read the House a passage which struck me very much in the remarks of Mr. Replogle, who was steel administrator of the United States Government during the War, and who was recently here inspecting our steel industries. He made these remarks, which I take from the "Financial Times" of 30th September last:
Great Britain possesses unrivalled opportunities to become supreme in iron and steel. You cannot be supreme in, say, agriculture or petroleum, but you can in steel. You have all the raw materials and also shipping facilities, but you lack imagination and initiative. Some of your plants are the best in the world, for instance, Stewart and Lloyds Tube Mills and the Lysaght Tin Plate Works, but they are few in number. Most of your plants are out of date, some of them were obsolete 20 years ago and are crying aloud to be scrapped. I have said in my report, and our engineering investigations confirm it, that there is no valid reason for the decline of the British steel industry and the employment of 250,000 workers in Belgium, France and Germany, making steel for shipment into England, which is certainly carrying coals to Newcastle,' and that with modern methods Great Britain can be comparatively in as dominant a position in the industry on this side of the Atlantic as the United States is on the other.

Mr. MACQUISTEN: Under Protection!

Mr. STRACHEY: In quoting that I am not suggesting that this gentleman's opinion is necessarily conclusive, but it shows that there is a very strong body of impartial expert opinion which is of the view that there is a great deal of room for reorganisation and that the question cannot be simply brushed aside. If that is admitted on the other side of the House, it seems to me that we on this side of the House have to make a corresponding admission, that in the case of the steel industry the question of reorganisation cannot be separated from the question of the control of imports. We have been told that what is needed—and I agree—is something analogous to the Coal Mines Bill for the steel industry; not a Bill drawn on similar lines, of course, because the problem is a very different one, but a Bill which provides for the control and the reorganisation of the steel industry so that it can be put on some basis of organisation, with allocation of orders and the other points in reorganisation which have been mentioned to-day.
Now in the case of the Coal Mines Bill, although it was a far-reaching Measure in that it quite definitely attempted to fix minima in the matter of price which cut right into the idea of leaving the price of the commodity to the free play of economic forces, there was no problem of imports. Imports of coal do not exist for us, and therefore the question of Protection or Free Trade, in the ordinary
sense of the word, was held not to arise, and the principles of the Chancellor of the Exchequer and the President of the Board of Trade remained entirely intact while they were violating the canons of the older economists quite heartily. There was no actual question of imports, which for them apparently is the sacred thing which must not be even approached. But if the Government tackle the steel industry—and every speaker on this side has emphasised that they must tackle it by an analogous Bill of reorganisation—it will be impossible to ignore the question of imports, because it would obviously be quite impossible to make effective provisions such as were made in the Coal Bill without dealing with imports.
I have neither the opportunity nor, indeed, the knowledge to make even tentative suggestions as to the type of Bill needed, but I believe that some kind of central council or board would have to be established in the steel industry analagous to the central council established for the coal industry, and I suggest that the central board in the steel industry will have to be given some control over the importation of steel into this country. If it is to be given such powers, of course it cannot be composed solely of steel producers. That would be a lop-sided arrangement, and the sort of organisation which obviously springs to one's mind is a board composed equally of interests representing steel producers and steel users; and this House and any Government, no matter what their fiscal opinions, might be very ready to accord to this industry any amount of Protection to which that industry could persuade the steel users to agree. I feel that in that fairly simple provision we should have a very effective safeguard against all those dangers which I touched on and which other hon. Members have dealt with so fully arising from an ordinary protective tariff.
We cannot to-night outline the exact form of organisation which should be adopted, but if there were meeting jointly perhaps with a central steel board something in the nature of a commodity board representing all the interests which used steel, to which access to cheap steel at or near the world price is of absolutely essential importance, I should feel that we had established by
far the most effective safeguard we could possibly have. Of course, the central board should be representative not only of the employers but also of the workmen and we might follow in this, too, the analogy of the Coal Bill. When I speak of steel producers, I mean that there should be representatives of the men as well as the employers. Again in the engineering trade or shipbuilding, etc., the trade unionists should also be represented: they would be charged with a special care of matters relating to wages. If we could have some kind of commodity board of that sort on which the steel users could be represented, and the steel producers were enabled by this means to keep their works up-to-date, then we should have constructed a body which might produce some sort of order and hope out of the chaos of the very near despair into which many of our great industries today have fallen. On these benches we do not feel that tariffs are a very appropriate form of taxing imports; they seem to us to be a very clumsy and out-of-date method.
I am ready to agree, however, that the actual form of Protection once it has been introduced at all—it has been introduced in the Coal Bill—is only a small matter compared with the basic principle of interfering with the free play of economic circumstances. I believe that it is along the lines which I have hinted at of constructing some sort of organisation such as a commodity board that we ought to proceed. All those interests balanced together on a board of that kind must be an instrument for the realisation of what the steel producers are asking for. The steel users will say that unless we can give them some particular steel at or near the same price which they are now paying they cannot agree to shutting out the foreign article. But they will agree to the exclusion of the foreign steel if they obtain a guarantee that they can be supplied at the right price. The steel producer will have to put his house in order in order to meet the demands of the steel user. In this way we should be continually improving the industry and there would be a steady pressure towards reorganisation. I am afraid that if Protection was applied in any other way our worst fears would be
realised. I have only put forward my suggestions in the hope that this debate would not degenerate into the usual wrangle between the orthodox view of the Free Trader and the orthodox view of a general tariff. I believe that the situation of this country is too serious for our constituents outside to view with equanimity that long-continued wrangle —which is still occupying our time on these benches. I believe that the people of this country are looking for something a little more constructive and a little different from that, and if they are not given something more practical in the immediate future they will lose very much of their faith in this ancient institution.

Mr. JOHN BAKER: I want to put another phase of this problem before the House. I am very pleased with the discussion to-day, because we have been trying to look all round at the problem before us, and we have not been throwing all the old arguments at each other which has generally resulted in nothing being done. Certain suggestions have been made, and I believe that the steel manufacturers of this country have a perfect right to come here and ask for our assistance. I welcome for two reasons the application they have made. One of those reasons is that they are admitting the failure of private enterprise by coming to this House and acknowledging the need for State action in order to preserve one of our basic industries, not in the interests of the employers alone, but also in the interests of the workpeople and the consumers of steel in this country.
I can assure the hon. Member for East Newcastle (Sir R. Aske) that although the employers have consented to drop the import duty, they are certainly asking for its twin brother in the shape of a subsidy. If the employers in the steel industry have got beyond that point, and if they will take the further step of accepting some national control in return for national assistance, I do not think the consumer need worry very much, nor do I think that the workman need worry. The steel trade has made very little profit since 1921. Wages are now regulated by the selling price of some particular commodity, and there are several cases where employers might, if they had ex-
ercised their full rights, have forced wages much lower than they have done. Employers have realised what, I think, this House should realise, that a wage of 30s. or 40s. a week is not adequate for a man and his family to live upon.
Steel has been sold at an uneconomic price as far as the manufacturer is concerned. The index figure has been below the Board of Trade index figure for years. To-day the index figure for steel is 112 and for other commodities 117. After a long struggle to revive the trade, the employers have now come forward with a modest request that their case should be considered. As regards wages, they always follow prices. When we come to consider plant and the organisation of the industry, we find that many of our blast furnaces are out-of-date and much of our steel plant is also out-of-date. I think that the Seconder of this Motion mistook the reorganisation of capital for the reorganisation of the industry. In some parts of the country the employers are closing some of the more out of date mills. I would like to point out that in 1928, 59 per cent. of the men engaged in the steel section turned out 96 per cent. of the products of 1920. In other words, six men in 1928 turned out as much as 10 in 1920, largely because we have dispensed with the less efficient machines and partly because of reorganisation inside the works. The result is that capital, the engineer and the workman have contributed towards producing an output 50 per cent. per man higher than the steel section produced in 1920. That is making some progress, and at least it is making an effort.
With regard to wages, the average wage in 1920 was round about £5 a week, while the average wage in 1928 and 1929 was round about £3 a week. It does not follow that because one man got £10 a week and another £1 a week that the £1 a week man is the cheapest. We want to know the cost of producing either pig iron or steel bars. We often hear comparisons made between the efficiency and the inefficiency of producing steel in different countries and in particular works in this country. I believe that the labour cost of producing steel in Britain to-day is less now than ever it was before. I have asked many employers to give me their labour cost of production, which is the real
test, and they tell me that the process is simple in the sections comprising the blast furnaces—the smelting—but in the finishing department it becomes increasingly difficult to get accurate figures as to the labour cost of the product. The employers publish gross figures, and I will give the gross figures for the production of the finished material in 1920. The gross figures for finished material in 1928, though the finished material may not be exactly the same, showed that labour received about 32 per cent. of the selling price of steel in 1920, but only 27 per cent. in 1928. It may be perfectly true to say that we have to-day a higher standard of living, and that the steel worker who is at work is better off, but we have to remember the man who has not a job. That is why we want trade reorganisation and help.
I saw a statement in the Press this week that 100,000 tons of tinplate were used every year for imported canned fruit. Why cannot we develop the canning industry in this country? If we established the kind of board which has been suggested this afternoon, I think they would look around for things like that in order to see how far it is possible to start new industries. I know one of these small industries which was started two or three years ago, and it is now doing five times as much trade as when it started. Surely there is some way of helping that trade to do 10 times as much as it is doing to-day. Why should we buy canned fruit from foreign countries when we have the finest fruit in our own country, and might use our own tinplate for canning our own fruit? These are all possibilities. I am glad that tariffs as such have been dropped in this discussion, because it enables a Free Trader like myself to look at the matter from another angle. Tariff Reformers may say that control is the equivalent. I do not think so, and for this reason. I have always looked upon tariffs as being in the interest of the employer. Tariffs have not protected the wages of workpeople in other countries; tariffs have not protected the conditions of labour or the hours of labour in other countries. I do not hate employers. They are a necessary evil; but, so long as we have them, I say here, as I have said elsewhere, that
they are entitled to their living just as our workmen are entitled to a living. I believe that reorganisation of the steel trade on the lines suggested this afternoon would bring prosperity to both sections.

Major TRYON: Those who have, if I may say so, so admirably introduced this Motion, may take it as absolutely certain that the first part of their contention is proved. The first part of the Motion is:
That this House views with grave apprehension the present condition of the iron and steel industry.
I think that that part of their Motion is accepted and not disputed. Where, however, I think there will be a difference of opinion, which I imagine will lead us to a Division, is that we on this side of the House consider that the Government should take immediate steps to stop the continuous decline in the activities of this industry, with its resultant increase in unemployment. We think that the Government should do something about this, and we await with some interest the speech of the Parliamentary Secretary to the Board of Trade, to hear what he is going to do in circumstances which are admitted in all parts of the House to be extremely serious.
It will not, perhaps, be fair for me to say that something ought to be done without being prepared to say that we on our side have our remedies, which we believe would make things better. Quite frankly, I am in favour of dealing with this matter by a tariff, and I further say, to those who reject the remedy of a tariff, that it is all the more urgent that they should insist on the Government taking that other action which they say is better than the tariff which we suggest. There are one or two points which have not been very fully dealt with during this debate. I will not go over the points that have been touched upon, but there is this point. Ours is a country peculiarly adapted for the production of this commodity, with natural advantages, and with workmen who, I understand, are admitted to be equal to or better than any in the world at this work; and yet, at a time of grievous unemployment, we are importing year by year millions of pounds worth of iron and steel manufactures which could perfectly well be made in this country. We hold that the simplest and most effective way of deal-
ing with the problem would be by a tariff, and we say to the Government that, if they accept the responsibility of not putting on a tariff, then it is their duty to substitute and inmmediately put into force some other method of dealing with this importation of goods which we could perfectly well make here.
There are, of course, two parts of this trade. There is the trade which we do in these commodities with foreign countries, and there the balance is nearly even. Indeed, I understand that in September we were importing from foreign countries more than we sell to them. Therefore, I believe it would be enormously to the advantage of this country if we put a duty on these foreign manufactures—a carefully selected arrangement.—in order that these things should be made here instead of abroad. When, however, we turn to the iron and steel trade overseas beyond foreign countries, we come to our trade with the Dominions, and it is in that trade with the Dominions that we get from the steel trade our purchasing power to assist us in importing other things. The Dominions send us hardly any iron and steel, and we sell to them enormous quantities. Therefore, if the iron and steel trade is surviving, it is very largely owing to the assistance given to it by our Dominions.
I am not going to encroach too much upon the proceedings that are now being discussed with the Dominions, but I notice that one Dominion alone, namely, Canada, imported the year before last about £60,000,000 worth of iron and steel manufactures from the United States, and I say that one of the things that this Government might do to improve the condition of this industry would be to endeavour to make arrangements with Canada by which Canada would take some of those goods from us and not from the United States. I think I may say without anyone disputing it that the moment is peculiarly happy, because, not only is the Imperial Conference going on, but the United States have recently imposed a very heavy tariff against Canada, and, therefore, this is a very natural moment for Canada to turn more and more to us. Now is the opportunity; I should like to know whether the Government will seize that opportunity.
We had a speech from the hon. Member for East Middlesbrough (Miss Wilkinson), in which she seemed to foresee the day when some infinitely wise people would take over the steel industry in this country from those who have been engaged in it all their lives, and, through the State, manage it much better than it is being managed now. I think the hon. Lady is very sanguine, and, when she spoke of the objections of Labour to tariffs on the ground of bitterness against employers, I was very glad that she was answered by the interesting and admirable speech of the hon. Member for Newport (Mr. Walker), who contradicted her. That the hon. Lady is not here at the moment is not my fault, but I can remember speeches of hers in the last Parliament which did a great deal to stir up the hatred which she now says is an Obstacle to a tariff.
I have, in my humble capacity, for many years advocated tariffs for this country, and it is a certain pleasure to me to notice the entirely different point of view taken up by so many Members on the back benches opposite. The highly Protectionist arguments to which we have listened from the back benches are in rather marked contrast to the Free Trade views which we generally get from the Front Government Bench. The word "Protection" has been boldly and firmly used on the opposite benches. Suggestions have been made that the question of imports must he dealt with, and that is our view. When, however, it is suggested that boards and Government committees should deal with these questions of imports, I would say that that is an incredibly difficult thing to do. Without any discourtesy to the present Government, I very much doubt if they would be able to manage a great business like the steel industry in the way that is hoped for when these boards are suggested.
I have, therefore, two main points. The first is that one of the remedies that we would apply to our present discontents and difficulties is the remedy of a tariff, which would enable us to make in this country a large proportion of the manufactured iron and steel products which we now import. My second point is that we should develop the iron and steel trade of this country by doing all that we can to enlarge our markets in the Dominions. Finally, in reply to the
only Free Trade speech during the whole discussion, which came from the Liberal benches, we do not accept the contention that, because we manufacture on a larger scale, because we do all we can to get modern machinery put up in this country by protecting and encouraging the development of the industry, therefore prices will be higher. We have not found that prices have been higher in the other safeguarded industries. Therefore, while we have our remedies, the point that I wish to put to the House, and the question to which we ask for a reply from the Government, is: In view of the fact that the House undoubtedly views this problem with grave apprehension, are the Government prepared to take immediate steps to remedy the difficulty?

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. W. R. Smith): I shall be expressing the mind of all hon. Members present when I say that the debate which has taken place to-day on this Motion has been one of the most useful and instructive that we have ever had upon any Motion submitted by a private Member. Nearly all the speakers who have taken part in the debate have spoken from a very close knowledge of the industry, and many facts and much useful information have been forthcoming from their speeches. I should also like to comment on the excellent tone in which the debate has been carried on, and I think that perhaps I should be entitled to say that that is in a large measure due to the very excellent manner in which the Motion was introduced by the hon. and gallant Member for King's Norton (Major Thomas). No one who listened to him would doubt for a moment his earnestness or his sincerity, while all would commend the tone which he adopted for the purpose he had in view.
In the different speeches that have been made, one or two suggestions have been put forward as to how best this problem might be dealt with. The Mover of the Motion suggested that this was a favourable opportunity for the House itself to give a lead to the Government, and, while it is true that he hesitated to submit what I am inclined to think was his belief as to what the remedy was, touching upon, it very lightly, he did make one other suggestion, namely, that of a subsidy to be granted to the industry. I
do not wish to dwell very long upon that point, because it was very largely answered by the speech of the hon. Member for East Newcastle (Sir H. Aske), when he pointed out that a subsidy as a policy is not something that can be confined to one industry. Indeed, when we discuss these problems as related to an industry, we are compelled to consider them from a much wider point of view than that of the industry itself, and there is not the slightest doubt that hon. Members generally will readily appreciate that this industry, bad as it is in its general economic condition, and bad as it is from the standpoint of the numbers of unemployed workers connected with it, is, at the same tme, only one of a number of industries that are so affected: and, if the policy of a subsidy had to be adopted as a means of enabling the iron and steel industry of this country to be carried on, it is difficult to see how that same policy could be refused to other industries that are similarly circumstanced.
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When one examines that proposal, one is brought to the conclusion that in the end we should find that the nation would be asked for such a sum of money as it would be almost impossible to find, and that very largely in the end it would be a question of taking the money out of one pocket and putting it into another without any tangible result. Therefore, I am afraid one is forced to the conclusion that a policy of subsidy, however well meaning may be the suggestions that have been made in regard to it this afternoon, is not a method by which to meet the problem that we are discussing so far as this industry is concerned. I think the suggestions that were made by the hon. Member for East Middlesbrough (Miss Wilkinson) are very useful, and might be followed up as a means of bringing to this industry a greater amount of employment than now exists in it; and the suggestions made by the hon. Member for Newport (Mr. Walker) are also worthy of consideration. Perhaps at this point I might answer one or two of the questions that he submitted so far as the position of the Government is concerned. He asked whether or not the report of the committee which had inquired into the iron and steel industry was to be published. Already, on more than one occasion,
Ministers from this Box have stated that it is not the intention of the Government to publish that report. I would like to say that that decision is not merely one of the Government themselves, but it is also one which harmonises with the views of those who took part in the inquiry, and very largely because much of the evidence and information associated with that inquiry and on which that report rests is of a. confidential nature.

Mr. WALKER: Is the hon. Member referring to the employers' side or to the workmen's side when he says that it harmonises with their opinion that that report should not be published.

Mr. SMITH: I do not know how far I am able to distinguish between one and the other, but my information, as conveyed to me, is that the industry is also of opinion that it is not wise to publish the report. It may be that the workmen are not associated with that point of view. It is therefore, impossible for me to say anything connected with this report because it is common knowledge that, unless a report is available to Members, it is not a subject matter for discussion so far as Members of this House are concerned.

Mr. GRIFFITHS: Can the hon. Gentleman explain, then, why the recommendations have appeared in a German newspaper and have been translated so that we have them in English, while the public of this country have no idea whatever what the recommendations are?

Mr. SMITH: It is not possible for me to give any information on that point. It is entirely news to me that the subject-matter of the report has been published in Germany as is suggested, and I cannot, of course, give any information whatever as to how that has taken place or what the explanation is. It would be almost impossible to discuss this question of iron and steel without ultimately getting to the old form of remedy which has been so often put forward in this House. It is quite true that it was not put forward by any speaker until my right hon. Friend opposite addressed the House, and came definitely down with the policy of tariffs as a means of solving this problem. He also asked some questions about the policy of the Government in regard to the Dominions and
followed it up by stating that these were matters that were very suitable for discussion, and, undoubtedly, would be discussed as part of the business of the Imperial Conference. Obviously, it is impossible for me to say anything about the subjects which have been and 'are being discussed at the Imperial Conference. He, like myself, must wait until they are published. Then he will know how far anything discussed there forms any contribution to the problem with which we are dealing.
The subject which we have discussed to-night in such an amiable spirit is not a new question to this House. It has been discussed many times before and, just as it is true that the present Government have conducted an inquiry into this industry to try to find some means by which the problem can be met, so also is it true that other Governments have held an inquiry into it and, therefore, have a knowledge of the subject practically equal to our own. Perhaps I might remind the House that in 1925 the late Government conducted an inquiry into the iron and steel industry and, just as this report of the Cabinet Committee is not available for publication, so the report and the conclusions of that inquiry of 1925 have not been published.
It is true, and it is within the knowledge of the House, that a question was put to the right hon. Member for Bewdley (Mr. S. Baldwin), and that he was definitely asked, arising out of the inquiry of 1925, whether he would adopt the policy of tariffs so far as this industry was concerned. Strange to say, the answer which the right hon. Gentleman gave the House on that occasion contained in terms almost the exact description of the conditions of the industry as it has been given to the House here this afternoon. Nothing was absent from his consideration. He stated that the investigation showed a serious situation, oppressive competition, aided by long hours, low wages, and depreciated currencies, which was being severely felt by our manufacturers, and he stated that, had His Majesty's Government been able to deal with the iron and steel industry in isolation, they might have regarded the case for inquiry as complete. Then, when he was pressed as to whether or not he would adopt a policy of tariffs as a remedy, he refused to do it, and one
of the reasons for his refusal was because of the repercussion on other industries in this country. That is the explanation, and I may say here in answer to the point made by my right hon. Friend, that he also added that, if he adopted that policy, it would be cutting across his pledges at the previous election not to adopt a general system of tariffs.
That position is perfectly clear, but the right hon. Gentleman, with all that knowledge and information arising out of that inquiry, with all the facts before him, with the knowledge that a policy of tariffs in connection with iron and steel would cut across his pledges at the election in 1924, did not seek to get release from those pledges in 1929. [Interruption.] I am open to correction, but my knowledge of the circumstances is that at the last election there was no attempt made by the party opposite to put before the country the idea and the suggestion that a policy of general tariffs was to form part of their policy in this House.

Major COLVILLE: It was clearly stated that the iron and steel trade had a right to apply for Safeguarding if the Conservative party were returned at the last election.

Mr. SMITH: That is not an answer to the point I am making. The right hon. Member for Bewdley declared when he was Prime Minister, with the knowledge of all the facts in the industry, exactly as presented to the House this evening—[HON. MEMBERS: "It is much worse!"]—I do not know that it is much worse. If it be so, it is very largely because of world conditions that it has grown worse. I do not know that the position of this country with regard to relative production is worse. It is not so far as the first nine months of this year are concerned. I believe it will be found that our relative production to the total production is better than in 1928. T am not certain about the figures, hut I think it will be found that the relative production is at least equal to 1928 if not better, while it will be found that the fall in production, so far as the protectionist countries are concerned, has been just as great as our own. The production in America and Germany has fallen to a substantial degree. It is wrong to suggest, when each country is suffering equally, when their system is
one of tariffs and ours one of Free Trade, that tariffs are a remedy for the problem with which we are dealing at the present time. It is, obviously, true that the party opposite, although they declare in favour of tariffs, when they were on this side of the House and had the responsibility of office and the opportunity of putting on a tariff if they were so minded, refused to do it, because they declared it was not in the interests of the country to do so on account of the repercussion which would take place in other industries.
Obviously, this question of tariffs on iron and steel cannot be considered apart from our great shipbuilding industry. You cannot consider this question separate and apart from the other great industries of this country. That is one of the great problems so far as tariffs are concerned. I had thought that there would be something of a fuller reply and statement from the other side of the House on this matter, seeing that they have taken up tariffs as a solution of this problem, after the statement of my right hon. Friend on Monday. The President of the Board of Trade was quite frank and candid in his statement as to the position of the steel industry and as to what the problem was. His statement was in the nature of a question to the party opposite to give an answer to the points he submitted, but no answer has been given here to-day. The Motion deplores the present condition of this industry, and requests something to be done immediately. If that is the issue before us, it is obvious that we cannot at this moment consider those wider questions, which will require a great deal of examination, that have been submitted from speakers on this side of the House.
We are concerned that some attempt shall be made to bring about a greater measure of prosperity and employment in this industry as far as we can in the existing conditions. The Government have not been idle in that respect. It has already been stated that, almost as soon as we took office, this committee of inquiry was set up to examine the whole problem so far as iron and steel are concerned. It has not finished with the conclusion of that inquiry, because ever since there has been a great deal of consultation taking place between the Government and representatives of the industry.
At the moment, the whole problem of the regional organisation of the industry is under consideration. Some amalgamations have already taken place, such as the amalgamation of Dorman Long and Bolckow Vaughan, and the whole problem, largely on a regional basis, is now under examination to see how far that can be accomplished with a view to bringing a greater measure of efficiency into the industry. After all, when we say we want to cut prices, one of the best means to meet that problem is to reduce the cost of production, and, while we on this side of the House would resist very strongly any attempt to reduce the cost of production by a reduction in the wages of the workers in the industry, we have never been opposed to any scheme of reorganisation which would increase the efficiency of the industry whereby the general cost might be reduced and a greater measure of prosperity follow. That is very largely the line that is being followed at the present moment.
In the very early days of this Parliament, the Government attempted, by legislation of a definite kind, to bring a greater amount of trade to this particular industry. One of the first Measures we passed was the Colonial Development Act. Very largely the purpose and object of that Measure was to bring about development in the Colonies of the Empire by big constructional works which in themselves might create opportunities for employment in this country. The Zambesi Bridge is an illustration of that fact, and I should say Middlesbrough much appreciates what has taken place in that respect because of the contract recently placed there for the constrution of that bridge across the Zambesi. Then there is the question of shipbuilding. The Cunard Company found themselves in a difficulty in connection with the insurance of their proposed new liners, a difficulty which the Government has met speedily, and I believe adequately, thus facilitating the construction of those boats. That is a very legitimate and proper method of stimulating industry along lines which are helpful and which in the end bring about employment. It is not the fault of the Government if more work of this description has not taken place. We have endeavoured to persuade the House to sanction a
scheme for a new bridge at Charing Cross which, had it been adopted, would have been the means of giving some more employment to the iron and steel industry for the necessary equipment and construction of that bridge. In the policy of developing, in conjunction with local authorities, road work, bridges, the abolition of level crossings and all that kind of thing, the Government have made a very real contribution towards helping this industry so far as immediate help can be given in existing circumstances.
It is not possible for us to resist the Motion in the sense that we could ask the House to go to a Division. It is couched in terms which, of course, are acceptable. It deplores the existing condition and asks for something to be clone, and my reply is that the Government is endeavouring, so far as it is possible, to do that something as a means of meeting the situation as we find it. I have said that this problem of the iron and steel industry cannot be dissociated from the general problem of world depression. It is part of that problem and must be considered in connection with it. In reply to my hon. Friend the Member for Newport, it is impossible to give any information with regard to national control by means of an import board apart from the fact that I will see that his suggestions are conveyed to my right hon. Friend, who undoubtedly will give them the consideration they deserve in connection with these consultations and negotiations that are taking place in the industry. I think the observations of the President of the Board of Trade on Monday apply here. As one hon. Member has said, this is all evidence that the present system will not work successfully and guarantee our people employment and good conditions in their life. It may mean that in the end we shall have to adopt some other methods and some other form of organisation before that amount of prosperity and well-being can come to the people that we should like to see. But that is not altogether the issue to-day. It is rather a question for immediate consideration. Tariffs are no solution of the problem, and right hon. Gentlemen opposite know it, otherwise, with all the information at their disposal, they would have put that policy into operation years ago. I can only express to the Mover of the Motion my
appreciation of the way in which he introduced the subject, and I say again I think the debate has been most useful and instructive, and possibly we have a better knowledge and acquaintance with the problem now than we had before the debate commenced.

Mr. MACQUISTEN: I think it is unfortunate that tariffs were not introduced in the 1924 Parliament, and the pledge that they would not be put on was unfortunate and the country has suffered very much by it. The sooner they are introduced into the industry the better. The hon. Member for East Newcastle (Sir R. Aske) took up the usual defeatist attitude of the Free Trader that we might, expect retaliatory measures from the Continent, but we always have had retaliatory measures. If you go to France you cannot get a collar stud that is not under a high tariff. The recent rise in rubber was due to the fact that France wanted it for her manufacturers. She helps her people all the time. The last people hon. Members below the Gangway think of are their own people. With regard to nervousness as to shipbuilding costs, I can console the hon. Member. There is a plant that can roll all the ships' plates that are used in Great Britain in about six months, and could roll all the ships' plates that are required in the world in about 12 months, at a much. cheaper rate than they are imported from Belgium or anywhere else, but it is not started because, unless it gets- wholesale mass production orders; it is not worth starting.
The hon. Member for East Newcastle ignores the effect of turnover. A small place of business that has a turnover of £10 weekly may be losing money. When it has a turnover of £20 with the same overheads it is probably making some money. When it reaches £30 it is probably making a substantial income, because the overheads are all the same. It is all a case of mass production, and you cannot get mass production unless you: have security and a protected market. People will not invest their money in it I admit that here and there there are plants in the iron and steel trade which are not as novel as one would like them to be, but you cannot get them equipped because- you cannot get money for an industry that is liable to the competition
of dumped goods from other countries which are fighting behind protective lines.
It is no use telling us, as the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) did that wages in Germany and France are much less than ours. The question is what do they buy and what is the cost of living? Every Belgian workman is a cultivator. Take the men working in the Spanish mines—I am conected with one of them. When the spring comes, they go to their farms, and in the autumn they go away to reap. What they need to buy is much less, because they have their own production and they have not to keep a string of middlemen and shopkeepers to get the necessities of life. The question is, are they really better off? It is said in the iron trade that a blacksmith always has a spark in his throat which he is continually endeavouring to extinguish. It is a very warm job. You have to find out the cost of living and what the German pays for a glass of Pilsener beer. It is the same in regard to the Belgian. You have to find out his house rent and what he pays for food and vegetables. That is the competition we are up against.
The hon. Member for Aston (Mr. Strachey) said we had to have either a high or a low tariff, but we could put on a medium tariff. A 33 per cent. tariff made all the difference to the motor trade and has caused a considerable' consumption of steel. International matters have made it very difficult for this trade. The Washington Convention put an end to a great deal of hematite steel used for battleships. That was one of the heaviest blows struck at the iron and steel trade. Allow us to have in our own country the production of the major portion of the 3,500,000 tons that come into the country —I admit it is the cheapest quality of iron and we prefer to make the best, because our labour costs are high and, it is better to have a high priced article; but give us the production and consider the mass production market and we will quickly make the steel and, if we do not, and if it still comes in, we shall at least get some taxation on the imported article, which will enable us to pay some of the burdens that are being imposed upon it.

Question put, and agreed to.

Resolved,
That this House views with grave apprehension the present condition of the Iron and Steel Industry, and urges the Government to take immediate steps to stem the continuous decline in the activities of this industry with its resultant increase in unemployment.

RATIONALISATION.

Mr. PALMER: I beg to move,
That this House, recognising the need for increased efficiency in British industries with a view to securing an improvement in trade and the conditions of labour, welcomes schemes of rationalisation to this end, but is of opinion that such schemes to be effective should provide for the reduction of inflated capital values, and to be just should provide that compensation for loss of employment shall include workpeople as well as directors.
It will be conceded at the outset that this comparatively new word "rationalisation" means different things to different people, and much that passes muster as rationalisation is the most irrational thing in the world to-day. My hon. Friends on this side of the House who have adopted the slogan "Socialism in our time" will agree with me that the capitalist system is irrational and that Socialism is the only alternative. The correct interpretation to place on rationalisation is Socialism. In any case, no one will deny that Socialism is rational, and the widest application of rationalisation can be the only solution to the great problem of unemployment. We heard the Minister of Transport claiming that his Road Traffic Bill is one of the greatest Socialistic measures of the day. In my view, rationalisation is production for use and not production merely for profit, and, also, it must mean, increasingly, a larger measure of State control in all the great key industries of the country.
In this connection, we have some indications in specific trades. I well remember a large employer of labour, with whom I have personally been associated for many years, saying: "I can make more profits by my economies than I can make on production." That sentence, clothed with its correct interpretation, means that he can by the displacement of labour immediately and directly save a large amount of money on his wages bill. That is the interpretation of the rationalisation which is going on all over the country and accentuating the great prob-
lem of unemployment. It is not the kind of rationalisation calculated even to assist and help industry in the last resort. If any credence be given to the Scriptures:
If any would not work, neither should he eat,
unemployment is absolutely irrational. The economist will come along, I expect, and say, "But there are not enough jobs to go round." Such a statement does not make the position any less irrational. If we look at the first conditions of unemployment we have to recognise that on the one hand we have people who are overworked, and on the other hand people who have no work to do. Rationalisation in its literal interpretation in regard to a problem like unemployment should ration work and reduce the extended hours in the one case and make them meet the case of the man who has no work at all. Take the concrete case of the miners. If 180,000 miners are unemployed surely the rational thing to do is to reduce, and not to increase, the hours of labour. It is equally irrational for 100,000 building operatives to be unemployed when at least half a million new houses are needed in this country. My submission to the House in the terms of this Motion is that a well-defined rationalisation should be applied. I deliberately place a wide interpretation upon the word in order that it shall lose nothing in force and application when I come to the particular.
The word "rationalisation" seemed to have come into use and political significance with what were commonly known as the Turner-Mond Conferences. This was, in my view, Whitley machinery, perhaps extended and enlarged with a big national and international scope, and the greatest organisation of employers and employed met together to see how far they could establish a two-party parliament for industry. It may have been a matter of strategy that the long-cherished word of the workers, "Nationalisation" was dropped and the word "Rationalisation" come into prominent use. I do not object, and, what is more important, I do not admit that rationalisation properly understood and properly applied is necessarily any watering down of a Labour party principle with regard to industry and trade. Rationalisation can be applied, no doubt, in a much wider scope and a greater range to industry than the restrictive policy of nationalisa-
tion. The strength of the claim for rationalisation rests upon the fact that it is admitted on all hands that industries are suffering failure because of obsolete machinery and antiquated methods, including the fallacy that reduced wages and longer hours are essential to industrial prosperity.
Industry has suffered and is suffering to-day more from over capitalisation than from anything else. The Government have been forced to recognise the failure of capitalism. Take the chemical industry. There you have a case where rationalisation has been applied on a big national and international basis, though in the process they have obtained a worldwide international monopoly. In passing, I have yet to learn how tariffs can help people who have their tentacles out in every part of the world. But I am bound to say that in the instance of the chemical industry the workers in many instances have been very badly served. Only today I received a letter from which I want to quote. It is from a man who has been in the employ of the Imperial Chemical Industries. He says that he was sacked and that he applied for re-instatement but that his application was not even acknowledged. He says that during his engagement he gained an exceptional knowledge of this so-called rationalisation and the inner working of rationalisation under capitalism. He admits that rationalisation in theory is idealistic, but that in the hands of unscrupulous financiers it is the worst and most atrocious crime against humanity in the history of the world. I can, perhaps, understand the man feeling bitter, but this is only one case out of many where in the process of rationalisation palatial offices are going up and every form of luxury is being flaunted before the workers, many of whom are looking for a job. Take another big merger—the Lever Brothers merger. There is another case where they have interests in every part of the world. They have their whale boats in the Arctic for the purpose of obtaining whale oil, and they obtain palm oil from the tropics.
The Member for East Leyton (Mr. Brockway) said, a day or two ago, that rationalisation means mass production and that, unless it is followed by mass consumption, there is mass unemployment. The purpose of my Motion is that
rationalisation shall be applied with a view to extending trade and securing for the workers greater tenure, shorter hours and higher wages. Rationalisation involves the introduction of modern machinery in the place of obsolete plant. The cotton industry is an industry where you find that over capitalisation has been, perhaps, one of the greatest disadvantages. It is not my purpose to-night to go into details with regard to any particular industry, but broadly this is the position: Here is a company owning, say, several mills. They have a modest amount of capital, we will say £300,000, and they are doing a fairly good trade and employing a number of workpeople. Along comes the financier who says, "You want more capital," and the £300,000 undertaking is formed into a limited liability company. The company promoter comes along and the capital is increased to £500,000. The load line of capital is increased and of necessity the rentier class draw from the industry at the expense of the worker.
On the other hand, I want to make it clear that the workers, led by their trade unions, have shown a remarkable disposition to help trade and industry and to make sacrifices in order that trade and industry might improve. But there has not been, under the present-day rationalisation, that reciprocity which would recognise that the worker should have his name and place on the map and should come under consideration. Last year I went to see some automatic looms at work in Lancashire. I was very much impressed by the looms, but the outstanding fact, as it presented itself to, me, was that whereas they used to have one worker for eight looms they required only one worker for 30. Perhaps some hon. Member will correct me if I am wrong, but I know that it is a very extravagant figure. I said to weavers and cotton operatives: "What have we to do as trade unionists in the face of a problem like this? Primâ facie this means the displacement of labour." To the credit of the trade unions, I remember one of the Members of this House, who was leading one of the unions, saying: "The first thing we have to consider is the saving of the cotton industry, and, if we can save the cotton industry, we shall be able to find our place in due course."
I mention that because in the schemes of rationalisation there has not been any disposition to recognise the sacrifices made by the workers in industry to save the trade. It, seems to me to be all a matter of the employing class, the capitalists, extracting a return for their money at the expense of the industry or at the expense of the worker all the time. The way in which the workers are displaced by modern machinery is illogical, irrational and cruel and a thing that must be corrected at the earliest possible date. In years gone by there was a period when the workers smashed the machines. The workers are progressing, and my appeal to the House is that, in view of the attitude taken by the workers to-day in sharing in the responsibilities of, and in co-operating in industry, and in many outstanding cases something approaching joint control in industry, they are entitled to expect from the employer class greater consideration than they have had in the past.
Yesterday, the President of the Board of Trade referred to cotton and said that the Government were a minority Government and did not want to introduce stronger measures. Nevertheless, he dropped a hint that in the case of cotton it may be necessary to secure larger powers. As often as there arc glaring cases of displacement in industry for the purposes of rationalisation. I want to see the Government taking greater powers. I am reminded of what the Prime Minister said with regard to the abuse of the unemployment benefit. He said that it is not always the worker who abuses unemployment insurance; it is very often the employer. The general condition of industry substantiates that statement. What happens in a so-called rationalised undertaking? There is a big merger, a prospectus is floated, an attractive dividend is offered for capital, and capital goes in. Every director, every member of the hierarchy of management who cannot be absorbed in the new undertaking is deliberately compensated. On the other hand, the' tendency of the employers is to say: "Why need we compensate the worker? If we- pay insurance to cover him against a period of unemployment, we are under no responsibility to look after him. He can go on the dole." A position like that in so far as it has grown up in this country
ought to be corrected. The rule that applies in the case of high-placed officials, directors and others who are compensated should apply to worker, the essential man in industry. He must also be compensated.
Take the position of the motor industry. One cannot think of Ford, Morris or Austin without realising that big schemes of rationalisation have been going on in those undertakings. The moral of what happened in the motor industry is this, that whereas there was a time when Morris would have gone down on his hands and knees, so to speak, to this House to get protective tariffs to safeguard his industry, the reverse probably has happened. The motor industry have been put on their mettle to recondition plant and machinery, to improve their methods of production, and to adopt mass production, which has increased the volume of employment rather than diminished it. The case of Ford is an outstanding one, because when he was challenged with the prevailing tendency of the employing class to cut wages his answer to a cut in wages in Germany was immediately to put 7 per cent. on the wages of all his employés. It is not a. sine quâ non of rationalisation that you should cut wages or that you should cut staffs. For a number of years I have been associated with a big undertaking in this country, on the trade union side, which has dealt with a rationalisation scheme, and I have yet to learn in that big undertaking, where there were something like 20,000 workers at one time, that one man has got the sack, or one woman where women were employed, because of the scheme of rationalisation. They have had regard to the people employed in the industry. It took years to complete the scheme, which has been running now for nearly 18 years. The 20,000 employés have been reduced to something like 17,000 by the process of taking advantage of the natural leakage of staff rather than the sacking of staff. If a man died he was not replaced; if a man went out on pension, he was not replaced; or if' a man left of his own volition and got a better job he was not replaced. Therefore, it is not a sine quâ non of rationalisation that labour should always be the first to suffer and that the great displacements
of labour that are taking place should continue.
The purpose of my Motion is not to go into the cases of specific industries, but I would point to the Government policy in respect to coal, transport, agriculture, iron and steel, cotton and fishing. There is an outstanding case where the Government feel that this is a real live issue which is related to the trade prosperity of this country and to the question of unemployment. The Government have travelled the world on this subject and have at last adopted tile Washington Hours' Convention. Rationalisation cannot be contemplated or applied without the obvious consideration of a general reduction of hours, so that the benefits of improved machinery and of a more scientific method of trading should be participated in by the workers as well as the employer class. The Government inquiry into banking, finance and credit promises rationisation in yet another field. Inasmuch as the Government give trade facilities of any description, I urge that they are in a strong position to insist that rationalisation shall not be misapplied by creating mass unemployment. The first charge on industry must be wages; otherwise we are irrational. When that charge against the undertaking has been met I have no objection to the other man getting his share of the profit. On the question of hours, improved machinery must play its part.
8.0 p.m.
With regard to the profits, capital under State control and State regulation of industry can secure for itself a greater measure of security. In the old days the capitalists used to say: "I have to demand a big price for the money that I lend, because I do not know whether this industry will go under or not." Increasingly under rationalisation, properly understood and applied, capital should be more secure, and if it does get security against loss because business is run more scientifically then the capitalist class ought not to extract the very full toll that they are extracting at the present time. A development of the home market and an increase in the purchasing power of the people is going to help trade more than anything else. For these reasons, I am glad that the Government have set up commissions and committees to deal with the depression in
the iron and steel industry, and the cotton industry, and also to consider banking and finance. They have also set up a National Economic Council which is to make a study of the developments of industry and to use national and Imperial resources for the benefit of trade and industry in this country. The Motion refers to greater efficiency in industry as a means of improving trade and the conditions of labour. I am not merely content with an attack on unemployment in industry by means of economy; that is not enough. I think that efficiency in industry, improved trade, the rationalisation of industry, far from displacing labour will improve the conditions of labour all round; but in addition to that there must be a reduction of inflated capital values. Until you provide a solution for this I shall not be surprised to find the industries of this country going down, but when rationalisation is applied, when capital is unshipped, when you get down to actual values, the industries of this country will become more prosperous. In the case of the coalmining industry we had the spectacle a few years ago of as much as £20,000,000 being put into the industry. What for? It was not applied for the rationalisation or reconditioning of the industry, or the improvement of plant or a better organisation of markets. The whole of that money, in the language of the Chancellor of the Exchequer, was wasted. It was granted I understand to maintain profits at a certain level. It certainly was not applied in. any increase in wages. There is a Measure to correct that in the Coal Mines Act, which deals with hours of labour, co-ordinates production, and also deals with the cutting of prices by exporters. It also deals with distribution and transport, and with the disparity between the prices at the pit head and the prices which the consumer has to pay.
All I say is that no Government should allow any industry to reach the parlous condition of the coal industry before rationalisation is applied, or the condition of agriculture and transport before rationalisation is applied. I hope there will he no conflict between the employing class and the working class over the terms of this Motion. What we are asking for is quite plainly stated. It is the need for greater
efficiency in British industry with a view to secure an improvement in trade and in the conditions of labour. It welcomes rationalisation as a means to this end. The Motion also says that schemes to be effective should provide for a reduction of inflated capital values, and for compensation for loss of employment for the working people as well as for the directors. I am encouraged to hope that the House will give its full support to this Motion. Rationalisation is very definitely mentioned in the King's Speech, where it says that—
My Government will persist in its efforts to develop and extend home, Imperial and foreign trade and to help in measures which will lead to greater efficiency in industry.
That is rationalisation. But I should be no less pleased, if it suited this House, to call it nationalisation or socialism, or anything else. I say that the Government have undertaken a process of rationalisation in their efforts to develop and extend trade and to promote greater efficiency in industry. The outstanding indictment against industry is the two million people who are unemployed. It is an indictment against the capitalist system. It is not an indictment, in spite of the debate yesterday, against this Government. It is a product of the irrationalisation which has been prevalent throughout the land for all too many years, and I hope, irrespective of parties, that this House will come to grips with the Motion and unanimously declare in favour of rationalisation with the interpretation and purposes I have placed upon it this evening.

Mr. HAYDAY: I beg to second the Motion.
Its three main points I think are quite clear. First, that there is a need for efficiency in industry, secondly, that there is a good deal of over-capitalisation which places an unnecessary burden on industry and, in the third place, that hardship is inflicted by the present position. I suppose we shall never learn exactly how many of the 2,250,000 unemployed are unemployed in consequence of new plant in industry. I shall have to apologise for using the word "rationalisation" constantly. How that word came to be used in this
connection is somewhat of a mystery. I suppose it has just dropped into its place and by constant repetition has been taken as conveying many interpretations. May I put it in this way. In the first place, I suppose we are all agreed that industry cannot remain stationary; it must improve in view of the developments of modern times. The newer ideas, the newer phases of internal and external competition, mean that there must be a rearrangement in this country in order to keep pace with other countries, and, if possible, improve our methods of production so that we may be able to go ahead.
The one thing I complain about is that the principles of this new adjustment are often misapplied. Does efficiency mean the efficiency of the man or the efficiency of the machine? Does efficiency merely mean effectiveness to give a financial return to investors, or does it mean something broader and more general; does it mean the efficiency of the worker within the industry as much as the efficiency of the machine? If we accept that then it naturally follows that you cannot have efficiency in its fullest and most effective sense if, through reorganisation, you waste much of the human material. You would create a loss of efficiency from the point of view of the human element within our great industries. It is to that point that I want to direct my few remarks. You may have efficiency in industry purely from the capital represented in the money invested, or from the capital represented in the plant, but at the same time you may be creating an inefficient body of labour which will not give the country the advantage of the efficiency which it is assumed is to be gained by new machinery.
These new methods are intended, I hope, to so produce articles as to create a greater demand. That can be the only purpose. You hope to create a fuller demand, and you hope in the course of time to reabsorb the labour units which were once associated with the industry, but in the early stages of this new policy you forget to make provision for the efficiency of the human material. You put it on the industrial scrap-heap, and it becomes more or less waste; and when your efficient mechanised instrument is called upon to absorb the increased labour force you will not have made pro-
vision for keeping that labour force efficient and effective, and you will lose, the nation will lose in the long run, any permanent efficiency that otherwise could, under a proper method and system, be retained; so that you would have machine, material, and method all operated by your efficient labour rather than by a means of making much of your labour waste.
There are schemes named rationalisation, schemes that have purely a financial aspect; that is to say, speculators loom large in the evolving of the rationalised schemes. Their money is invested without knowledge of the industry. So their interest is purely financial, not national; efficient just so far as their money investment will bring effective interest. It is not unknown that within that type that there is more capital invested than the undertaking can eventually carry. Side by side with that it is not unknown that gambling goes on within the rationalised industry. That leads one to assume that the sole motive is mercenary. Under that method and that system there is a merciless disregard of the human unit. I know of cases where an industry has been the sole means of maintenance for five or six villages, and under some great scheme works have been bought up and shut down. There is no other industry except some small agricultural interest there. Men are thrown out of work and email shopkeepers and all other interests in the villages might well become derelict by the operation of that which has a purely mercenary motive and is operated from a distance by those with no knowledge of the industry.
There is, it is true, another kind of scheme that one should encourage, and that entails the gradual scrapping of obsolete methods in industry, the broadening of the scope of operations by captains of industry, men who by their valuable knowledge can promote and extend schemes and eliminate much petty and wasteful competition and duplication of plants. But even there one wants to know to what extent the human unit has 'had any consideration at all. Reference is made, of course, to the old riots of little more than a century ago, in which the Luddites were engaged. Recently I read a speech made in another place by the then Lord Byron calling attention to the effects of the introduction of machinery in Nottingham. The workman
then felt that the machine would take bread from his larder, and he regarded the machine as the enemy. It appears to me that even if in those days there had been less autocratic and despotic action by those introducing the new methods, and more consultation between all the interests involved, the men would have understood that the machine, far from being a burden and a destroyer of their livelihood, would lighten their burden and become a blessing when operating under conditions which took all the units into account.
That is what we are asking for in this connection. It is said that we should avoid throwing workers out of employment because it is not scientific. It is the easiest thing in the world for someone with money for investment to say, "Here is an opportunity," and in his greed want an immediate return for that investment, in such volume that he thinks he would be justified in obtaining a monopoly of the product coming within the purview of large-scale rationalisation. The very first question asked, in some cases, is, "How can we reduce our production costs still further, not by rearranging the hours or the shifts of work or by extending holidays or letting the employés participate in any benefit. How many can we discard and to what extent can we use the science of the machine to intensify the labours of such as are permitted to remain within the ambit of the industry?" Not only is there labour laid waste, but there is increased strain on those who are left in the industry, who have to keep pace with the modernised machine and will be called upon perhaps to perform the work of two men. I would urge that such schemes, before they are brought to fruition, should provide for consultation. With whom? With the trade unions involved.
They should not only consider the matter in terms of money—in terms of what will the machine cost, what will be the overhead charges and so forth. They should not say "The residue, what stands between us and our profit, is the measure of the payment we can give in wages and is the very last rather than the first thing to be taken into consideration." I ask that the human unit in industry should have, at least, equal consideration with the machine. It is not unreasonable to ask that great investors, great captains
of industry should consult with the trade union representatives in order that schemes of this kind are brought into operation with a complete understanding on both sides, and with more or less complete goodwill. That, in itself, will be a guarantee that the modernised methods will have full and unrestricted opportunities of fulfilling their purpose, of lightening the burden to the consumer, to the producer and to the nation as a whole. Many investors will ask, "What is to be my return and what are the costs involved?" I suggest that it would not be unreasonable that labour should be able to ask "What are to be the general methods of the rearrangement of work; to what extent can we have shorter hours so as to retain the efficiency of the human unit; to what extent can we have an increased annual holiday that will enable us to maintain efficiency and to keep more people in employment; to what extent can there be a variation in our shift work and matters of that sort?" None of these great rationalised schemes can expect to have the goodwill of the public or of the Government, unless within these schemes, some arrangements are made for those who will in any circumstances be displaced.
The Mover of the Motion mentioned that there had been discussions between representatives of the Trade Union Congress and the Lord Melchett group. As a matter of fact there was agreement on this very point. There was agreement that it would be the right thing to consider to what extent these industries could carry a provision for a labour reserve fund. Instead of all the money going to the financial investor, there should be an arrangement for the creation of a labour reserve fund, in 'order that the rationalised industries shall carry part of their responsibility for the surplus of labour created by their own act in bringing about these great schemes. It is not an unheard-of proposal. Such things have been done. In connection with the arrangements between the State and the Electricity Commissioners there is a provision that upon amalgamations, and the sweeping-out of smaller units, displaced labour is to have compensation for loss of employment.
There is another industry, partly owned by private companies and partly by local authorities, in connection with which I and others have concluded an. agreement for compensation for loss of employment. After thoroughly discussing the effect of amalgamations and absorptions in the gas industry, and. arrangements made between two or more undertakings it was agreed that where men were transferred to forms of occupation which were less remunerative than their former occupations, there should be a balance in the scheme to give compensation for the loss. As regards the others for whom there was no hope of being retained, there would be compensation for loss of employment on an agreed scale. In the case of that industry there is complete understanding because consideration of the human element eaters into the discussions involved in any scheme of the kind. If that is not done, it seems to me that there is another way. If you have this understanding with the trade unions that the human unit is to be given consideration in any arrangements made, so that the workers shall benefit and not have hardship inflicted upon them, you will create such an atmosphere of good will, that the Government of the day can go forward and strive for international agreements such as would prevent cutthroat competition externally, while promoting a greater degree of contentment internally.
My last point is this: To what extent the present figure of unemployment has been swollen by recent schemes of rationalisation, no one can say with any degree of certainty. We hear of works being shut down, of 2,000 or 3,000 people being thrown out of work, of one-third of the employés of a particular concern being "stood off." We hear of trade in certain industries being 25 per cent. in advance of the 1914 trade, and yet under the new schemes 30 per cent. less labour is being employed. We can only conjecture that quite a large number of people are unemployed to-day because of the new schemes for creating greater efficiency in industry. Whose responsibility are they? They are discarded in the march of industrial progress. Does no responsibility attach to these great rationalising schemes? We say that there is such a responsibility. If the industries refuse to accept that respon-
sibility and to negotiate with the trade unions, they have no cause of complaint at the Government feeling compelled to maintain such people in some degree of efficiency. It simply means that where industry fails, the nation must take the responsibility.
If the nation thinks it unfair to have to undertake the whole of the responsibility, then the nation must point out to industry that it has its responsibility. If industry does not accept and shows no desire to accept, to such an extent as is possible, its share of the responsibility, I should say to the State, "Because you allowed the growth of these schemes regardless of the human element, you will have to pay the price which the employers have refused to pay. You must pay that price to the full and enable the human element to retain its proper status and not go to waste and keep it ready and available, in a state of effectiveness, until rationalised industry has created a new world demand and asks for its re-absorption." Those people must go back completely equipped, as fully efficient as the machine which they will be called upon to handle and which was originally the instrument that caused their unemployment.

Lieut.-Colonel MOORE: I feel sure the House—what is left of it—will not wish me to follow the line which was taken by the Proposer of this Resolution, who, if I may say so with all deference, introduced a class bias into his remarks which was unworthy of the greatness of this subject. There is no one, on whatever side of the House he sits, who does not want to see all the three participants in industry get their proper reward out of it, or proper compensation for displacement, whether it be capital, manual labour or brains.
As regards the Seconder of the Motion, the hon. Member for West Nottingham (Mr. Hayday), he is, as we all know, a very prominent figure in the trade union world, and naturally everything he says is accepted with the greatest respect. I was very much taken with the moving way in which he appealed for more protection for the class that we all want to see more adequately protected, where a merger or a scrapping takes place, and that is why I think there is much to be said for the subject
in which he and Lord Melchett are so interested, namely, co-operation in industry, because it will ensure that where such merging or scrapping takes place in a plant, factory, mill or yard, there will be something left to each participant in the industry to compensate them for what they have lost. One of the things that I would like the hon. Member to do, since he is keen on this great subject of rationalisation, is to preach it, and to cause his colleagues to preach it, with more assiduity in the constituencies. From a personal point of view, if the hon. Member will do that, he will save me a lot of unnecessary heckling in my constituency.
I do not want to pass from this subject without commenting with some regret on the empty benches all round, not because of what I am going to say, but because the subject is one of such vital importance at the present time. I cannot conceive what keeps people out of this Chamber under present conditions. I can only believe that those who are here are present because they want to speak, and not because they want to listen. Fortunately, I am not addressing those who want to speak, but that placid and patient occupant of the Front Bench opposite, the President of the Board of Trade, who, I know, receives every suggestion in the spirit of good will, even though he does nothing to meet it. That brings me to the point of my remarks.
Rationalisation is so interwoven with the question of unemployment that my mind is recalled to an offer made by the President of the Board of Trade a few days ago, when he said he was desirous of receiving suggestions, but one feels a little bit restricted about accepting that offer when one remembers that queer complex in regard to suggestions that inhibits the right hon. Gentleman. He goes to the nations of the world and says, "Let us discuss a means of standardising or reducing tariffs," and at the same time he ties his own hands by the Tariff Truce from being able to carry out any suggestions that may be made. The day before yesterday he made a suggestion that we should give in some suggestions to increase employment, but he tied our hands by refusing to accept any suggestions beforehand which would involve either a tariff or a subsidy, so that one feels diffident about making sugges-
tions, in spite of the good will with which he invites them. However, I will overcome that reluctance and make two or three.
I do not suppose there is anyone in this House or in the country but regretfully acknowledges that rationalisation has to come. It is with regret that acknowledge it and accept that position, but what are we going to do about it it we do not? We cannot stand still. We must either go back or progress, and where there is a plant, a mill, a factory, or a yard—and I am particularly interested in shipyards—that is badly placed, perhaps from a transport point of view, possibly equipped with old-fashioned machinery, possibly inadequately helped by local resources, undoubtedly such a shipyard must go, because it is not contributing its fair share to the quota of output and, therefore, is not contributing its fair share to the general progress and prosperity of the country.
We have to recognise that the position with regard to shipping particularly is not as good as it was before the War, when, taking one point of view alone, 25 per cent. of the value of the shipping produced was in warships. To-day there is not one-seventh of that 25 per cent. in shipping in ships of war. I am very glad of it—it shows that we are marching in the right direction—but nevertheless it shows how essential it is that the shipping industry especially must be rationalised. Then 'another point which is of particular interest and, I think, is probably unknown to many of my listeners, is that the average size of merchant ships, particularly in breadth, has increased very definitely during the post-War years, and that means that there are fewer berths now required for the same tonnage. In fact, where before the War 500 berths would be required for X quantity of tonnage, to-day only 350 berths are required, so that whatever feelings of regret we may have about it—and we all share them—rationalisation of the shipping industry must proceed.
Now here are my suggestions. While that is admitted, nevertheless it seems to me that discrimination, and a very meticulous discrimination, should be used in this question of rationalisation. Where
you have small shipyards—I have four of them in mind of which I have some little knowledge—that are adequately equipped for the type of ship that they build, where they are situated on the sea, as in the yards that I have in mind, where they have all those facilities in the way of transport and natural resources, railways, water, and so on, to make easy the process of output, then I think something should be done to maintain those yards as a national asset against the time when the turn of the tide will come and prosperity will again come too.
These will be assets which the nation can ill afford to lose. I speak with knowledge. These are yards—and there are many like them all over Great Britain—well and economically managed, with the highest skilled workmen in the world, with natural resources and with suitable equipment and plant. Are we going to let these go because of the depression, not only in shipbuilding but in all trades, because all their reserves have been used up, and they have nothing with which to carry on, nothing with which to get contracts, and nothing with which to keep up their establishments? Therefore, I suggest to the President of the Board of Trade that a similar corporation to the National Shipbuilders Securities Corporation should be formed with Government support or under Government supervision, to advance money to such shipbuilding companies as I have described, to enable them to carry on, to get contracts, to pay their way, and to keep their men employed until the better time to which we optimistically look forward.

Mr. McKINLAY: Will the hon. and gallant Gentleman say who owns the major portion of the share capital of one of the firms referred to?

Lieut.-Colonel MOORE: I do not think that that question arises. I do not say that anything that is inefficient should be subsidised, but, if the Government were satisfied that a yard were not redundant to the anticipated requirements of the nation, and if it were not obsolete, either in machinery or equipment, it might receive from such a corporation as I have suggested a loan at a definite and reasonable rate of interest to enable it to carry on, to keep the men employed, until the nation can again call upon their services.
Another suggestion is that there should be a closer contact between the President of the Board of Trade and this National Shipbuilders Corporation. I would like to see the Government as a sort of liaison officer between the Corporation and the newer industries, so that when a yard is bought up, as some have been by the Securities Corporation, they should be in such close touch with the Government so that, prior to the dismantling of the yard, other industries in need of premises may be given the opportunity of taking the yard, and at the same time be enabled to put men who have been displaced into the new work that would be carried on in the yard. The only thing is to get the contact, and the President of the Board of Trade seems to be the only person who is equipped for that purpose.
Think what this would mean. We see on the Great West Road at Slough great factories from abroad and elsewhere being erected which need plant not totally different from shipbuilding plant. We see factories for new industries being started even in these depressed times, and if the President of the Board of Trade would be a liaison officer in constant touch with new industries and with the Corporation who are dismantling yards, there would be tremendous savings, because when a yard is dismantled stuff is sold at any old price. I saw a canteen at a yard being sold off for nothing at all, but that might easily have been taken over by a new industry, such plant as was appropriate being made use of. A yard in my constituency has been bought; it was a new yard built for the emergencies of the War, magnificently equipped, well managed and in thoroughly efficient condition, with the latest machinery and the best equipment in Scotland, and that means the best. This yard has been taken over by the Corporation. The result is that 800 men have been displaced. At an average of a week their wages came to £2,400 a week, or £1,000,000 a year going into that town. That meant £1,000,000 spent in the shops, on housing and on the amenities and happiness of life, and all that has been stopped by this process of rationalisation. I am not blaming rationalisation, but chances are being lost of starting some fresh industry, some fresh means of employment in that locality.
My third suggestion is with regard to the question of the life of ships. It involves money, but money and human life are things that do not enter into competition. Why not scrap, break up and dismantle altogether all merchant ships of over 20 years, and at the same time bring in warships, but make them 15 years? Warships must be brought in earlier, because they are out of date long before merchant ships. The ships must be broken up, for there is no use selling merchant ships to Greece or one of our foreign competitors, where the Board of Trade regulations are not nearly so stringent. We should only get further competition against our own shipping. To break up the ships needs some form of compensation in respect of the ships that are dismantled, but what of that? After all, it is the natural desire of the present Government to spend money and create employment. Suppose that it cost millions of pounds, and that a special loan had to be established to pay the compensation, surely the return would more than pay for the interest, even from the commercial point of view, in the development of the shipping industry and the large distribution of money and wealth which would take place as the result. I advance these suggestions to the President of the Board of Trade, and if he can see his way even to consider them, he will have done something to advance the general good and welfare of this country.

Mr. T. SNOWDEN: The Mover and Seconder of this Motion dealt with rationalisation in a most comprehensive and useful manner, and as the hon. and gallant Member for Ayr Burghs (Lieut.-Colonel Moore) has said, whatever might be our opinion, we have to face what seems to be the inevitable fact and deal with things as they are. Reference has been made to the fact that industry did not apply itself as it ought to have done having regard to the present situation. It has been stated that machinery in the textile and other industries is obsolete, and that, as a consequence, we are unable to get the best out of the machines. It is so obsolete that we are unable to compete with foreign countries, and that accounts for our inability to find employment that would be found if the machinery were more efficient. It is obvious, of course, that if our machinery is not up to date in every way we shall not get the production which otherwise would be possible.
In the textile industry, with which I happen unfortunately to be associated— unfortunately for the present, because there have been good times and there have been indifferent times, though now they are bad times—it would not be strictly true to say that the machinery is any worse than in any other industry. In recent years industrialists have done remarkably well indeed in that respect, particularly having regard to the financial difficulties in front of them; but I am prepared to admit, and it is a fact which ought to be faced, that there is in the textile industry a considerable amount of waste which might usefully be eliminated, though I will not stop to describe it now, because it would mean going into technicalities. There is another factor which the Mover, and particularly the Seconder, emphasised, namely, that of the human element. I was pleased to hear the hon. and gallant Member for Ayr Burghs make reference to the possibility of closer contact between industrialists and employés. I know that there are Members on this side of the House who are not very favourable to such a proposal. It is looked upon—at least, it was looked upon until recent years—with a considerable amount of suspicion. It was felt that it would stave off the time when industry would be nationalised, and would perpetuate a system which we on these benches think ought to be eliminated. But in spite of the fact that some of my friends may differ from me, and having regard to the note struck by the President of the Trade Union Congress, I must say that I think there is a good deal of common ground; and without being dogmatic I would say, that in our industry we have not taken enough advantage of the potentialities of the human element by giving workpeople the opportunities which they ought to have had.
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It used to be thought that if workpeople were given greater responsibilities and brought into closer contact with management, they would lose their head, and that as a consequence employers would not be able to do as formerly. Opinion on that point is changing to a large extent among employers, and that is all to the good; and I can say from my own practical experience that it is a paying pro-
position, from any angle, to take workmen and workwomen more into your confidence and give them greater responsibilities than they have enjoyed up to the present. Unfortunately, a good many of them, through tradition and association, and because their parents did not occupy certain positions, have been far too prone to show an inferiority complex; but the experience of a number of them in certain firms has demonstrated beyond a shadow of doubt that there are latent in the workmen and workwomen of this country a skill and ability in administration which have only not been manifest before through lack of opportunity. Although machinery may be brought up to date, if rationalisation is to be successful we must reckon with the human element far more than we have hitherto done. It is a mutual proposition. In spite of what the hon. and gallant Member for Ayr has said, I do not think it can be maintained that the results of industry so far have been of a mutual character. If the employers of 30 and 40 years ago had shown the spirit manifested by employers at the present time, we should have been far better off than we are. When we talk about rationalisation we should think more about the human element and not regard workmen and workwomen as mere cogs in the industrial machine.
The Mover of the Motion referred o what is happening in other industries, and particularly the motor industry. With great respect to him, the analogy between the motor industry and the older industries is not a good one. The motor industry is a comparatively new one, and it is impossible for anyone to talk about standardising things in say, the textile industry as they are standardised in motoring or engineering. I do not think either the Mover or the Seconder of the Motion would like to see everyone going about in the same kind of suit. There are many productions of the textile trade which cannot be standardised in the way that machinery can be standardised. All the same, I am prepared to admit that there is a considerable amount of waste in the textile trade. For instance, I should say that, in the aggregate, millions of pounds are wasted in Lancashire and Yorkshire, in the West Riding particularly, in producing a thousand and one different samples from which one hardly gets any response at all. The
industry could be reorganised to eliminate that waste without impairing business in in any way—I am not talking of home trade—and we could meet foreign competition in a far better manner than we are doing. There can be rationalisation, though it may not be capable of effecting so much as in other industries.
We are not able to do that in the textile industry. There are other factors to be considered. One of them is that up to the present time we are trying to develop on lines which have not been tried before as they ought to have been tried. Men and women have made suggestions of a character that might have been tolerated far more than they have been up to the present time. There must be more tolerance in industry than has been shown in the past. Another feature is that people are beginning to ask: "Who is going to benefit by rationalization?" I am satisfied that the consumers are going to ask, as they have never asked before "Are we, as consumers, going to benefit by rationalisation along with the workers?" That factor is of such a character that we shall have to face it sooner or later.
It is becoming widely known that the President of the Board of Trade is going to introduce a Bill which is likely to deal with that question. One thing ought to be mentioned at this juncture, and it is something which we, as Socialists, ought not to forget. We have been working these things out, and when these remedies were suggested 20 or 30 years 'ago by old Socialist agitators they were met by the reply: "Impossible. This competition in industry is good for the workers because it finds work." Socialists many years ago prophesied that in time to come this competition would have to go, and that rationalisation would have to be substituted. Although that word was not used at the time, they suggested that there would have to be co-operation instead of competition. What is being proposed at the present time is on all-fours with the prophesies that the Socialists made years ago. When we remember that banks and the coal and cotton industries have been rationalised to the extent which they have to-day we ought to pay a tribute to the Socialist agitators who prophesied years ago what would happen.
Another important matter is the human factor. It cannot be gainsaid that there is a spirit abroad which suggests that such a desire ought to be consummated, because, whether we like it or not—I am not here to speak for employers—unless there is a better spirit engendered right through industry and we face facts I am certain that, although things are very bad indeed, they are likely to become much worse. So long as we can discuss these questions in the temper which has been shown this evening by the Mover and Seconder, this Motion will not have been moved in vain, and the country, as a result, will profit by the suggestions which have been made, and the human element must not be overlooked.

Sir ALFRED LAW: We have had a very interesting discussion upon this Motion. When I read the Motion I it, quite impossible to disagree with the passage which reads:
To call attention to the question of rationalisation;
and the sentence
recognising the need for increased efficiency in British industries with a view to securing an improvement in trade and the conditions of labour.
The assumption seems to be that there has not been any rationalisation, but I would like to point out that throughout the country rationalisation has been going on. What is the reason for rationalisation, and what has caused the necessity for it? One reason is the increasing keen competition which we have to meet from foreign countries. It has already been mentioned that there is a disparity between the price of manufactured articles and the price charged to the consumer. In order to keep our mills going—I happen to be engaged in manufacturing myself—we have had to do our utmost to keep down prices, so that the middleman and the retailer will be able to have their profit. I agree that there is a great disparity between the manufacturer's price and the price paid by the consumer. The Mover of the Motion said that in order to bring about more rationalisation we should provide for the reduction of inflated capital values. I happen to be connected with a firm which has reduced its capital —I am one of the shareholders—and others have done the same thing. That process has been going on for some time.
What is the alternative to rationalisation? What would have happened if, instead of introducing rationalisation in industry, nationalisation had been adopted, because that seems to be in the minds of the Mover and Seconder who believe that nationalisation would be a good alternative. My view is that nationalisation would be one of the worst alternatives you could adopt, because it means that you would establish hordes of Government officials with the result that business could not be managed in the same way as it is managed at present, and the people would be no better off than they were before. I wonder if the trade unions, in advocating nationalisation, have really studied what would be its effect— whether they have taken into consideration the intricacies of trade, the difficulties of manufacturing and management, of dealing with customers, with hankers and so on. I think they have hardly gone into all these questions, and, therefore, that part of the Resolution would not meet with our approval.

Mr. PALMER: I do not want to interrupt the hon. Member, but I took pains to point out to the House that I was rather spelling "nationalisation" with an "r"—that it was rationalisation that we were advocating, and that in its operation, it would become national and comprehensive. It was in that sense only that I used the word "nationalisation."

Sir A. LAW: I am much obliged to the hon. Member. Again, the human element is a very important problem. The hon. Member who spoke just now said that a better understanding had come about between employers and employés, and that is vastly to the good. We do understand each other better than we did 30 or 40 years ago. No one is more anxious about the human element than I am. I quite agree with hon. Members opposite that the human element should be more considered, and, in the firms with which I am connected, we do consider the human element. I have in mind one company where, on attaining a certain age, the employés become shareholders, not by having been told to purchase shares, but by being actually provided with shares.

Mr. McKINLAY: Deferred wages!

Sir A. LAW: Also, in a company which I have in mind, employés on reaching a certain age who have been engaged long enough in the particular mill in question are given pensions—not pensions to which they have been asked to contribute, but voluntarily granted pensions for life. It is very seldom that I trouble the House with any remarks; I prefer rather to listen; but to keep silence may sometimes be failing in one's duty, and that is what prompted me to add a few words to what has been said already. With most of the Resolution I agree, and I think it is a very happy idea. The hon. Member for Greenwich, by introducing this topic, has, as the last speaker said, provided us with the opportunity to have a friendly and, I hope, useful debate, which I think will do good.

Mr. BOWEN: This subject is one which, in my opinion, will require more frequent discussions than can be obtained by a chance vote in the Ballot, and those discussions must come in the very near future. I think that very few people can deny, on giving the matter a moment's thought, that this subject is bound up with the question of unemployment so seriously that consideration of the question of reconstruction is required side by side with everything that can be said in regard to rationalisation. It is quite true that, as the hon. Member for High Peak (Sir A. Law) has said, rationalisation has been going on. There are discussions occasionally as though this were quite a new theme, but in our trade union movement we have known rationalisation all our lives, and the best part of our duty has been to prevent men being discharged from work in order that employers might adjust their staffs more nearly, in their opinion, to the requirements of their factories. Rationalisation, therefore, is not a new thing at all. The word is a new one, coined, I think, in Germany, and we have adopted it here in order to have some kind of new slogan which is hurled at the workers very frequently, as showing the necessity for a reduction of their numbers in a given industry.
The hon. Member who has just spoken referred to the necessity for rationalisation, by which, I suppose, he meant a more accentuated rationalisation. He
referred to our competition with foreign countries, and to the difference between the cost of manufacture and the price that the consumer has to pay. Although I should not regard this necessarily as a controversial question, I respectfully suggest that the question might be put to manufacturers and traders as to why some attempt has not been made to adjust that difference in prices, which makes a real difference to the consuming power of the working classes. The hon. Member fears, as an alternative, nationalisation, and the creation of hordes of Government officials. Are Government officials such dreadful persons that they need be feared? Some of them may be; it just depends on what you have done yourself. A policeman, perhaps, may not be a very welcome person to come near you, but an inspector of factories is a very necessary person, in my submission. I have no fear at all, however, that, if the alternative is nationalisation, a horde of Government officials will walk about unnecessarily with their hands in their pockets. Work will be needed, and, under nationalisation, more service will be demanded than can be obtained under the existing system.
The hon. Member for High Peak asked a question which must be answered. He asked, did trade unions study the effect of nationalisation, and all these other difficulties which traders and manufacturers have to consider 4 Their whole lives are taken up in considering these questions, and probably they know as much as, if not more than, many manufacturers know themselves about the difficulties. Indeed, the trade union movement to-day must be regarded as a study of industrial conditions, owing to the need for preserving industry, not only in the interests of the workers, but in the interests of industry itself. Therefore, while I appreciate the hon. Member's suggestion that there are employers who give thought to their workpeople—and I am glad to hear of it; I know of a good many who provide pensions for their workpeople—the simple fact is that industry as a machine, in this and every other country, has not yet taken sufficiently into account the fact that people have human lives to live, and that they are in industry to make the best of them.
Therefore, the subject is one which is so closely bound up with reconstruction and unemployment as to demand the whole attention of every person connected with any party in the House.
It is a sad commentary on the interest taken in this subject that we should see such empty benches, but we must make the best of our case and present the Resolution as one that is entitled to consideration from every point of view and, if necessary, spur on the Government to take more and more interest in this subject with a view to seeing how far it can be put right. In dealing with the subject of rationalisation, there must necessarily come into the picture the effect of introduction of new machinery. We have heard from our own Government Bench the statement, with which I entirely agree, that in order to restore industrial competency it would be necessary to do away with obsolescent plant and introduce new machinery, in order to compete with foreign countries and to produce more efficiently ourselves, but all our efforts will entirely fail if a cold and soulless machine is to be regarded as of more importance than flesh and blood. It is this side of the subject which concerns me more.
I heard with great interest the statement of the hon. and gallant Member for Ayr (Lieut.-Colonel Moore), and his sympathetic regard for the condition of the workpeople in industry in his constituency. He spoke of the shipyards being empty and without work. In my own constituency I can see something, too, of that, where they make locomotives and have to repair them. There is a big railway company concerned with the wellbeing of the town in the constituency I represent. We see that big company, having a monopoly of all the amenities of the district for industrial purposes, finding themselves in difficulties in maintaining industry in full strength. We have hundreds of people discharged from the Crewe works without any prospect at all of other work. The point must naturally arise that if we are to consider the reconstruction of industry we must not consider only the effect in a given area or given industry, as suggested by the Seconder of the Resolution. He said that in the gas industry it was possible for his trade union and for employers to arrive at conclusions and decisions which mitigated a good many of the hardships,
but if you have in a small town, like that to which I have referred, where there is no other industry and where work entirely fails, as also in the case of Ayr, consideration must be given, in reconstruction or rationalisation, or anything you like to call it, to the question of the transfer of the workpeople from one part of the country to another. That must necessarily affect industry.
Germany, I suppose, may be called the most rationalised country in the world, and she has 3,000,000 men out of work. I read the bulletin of the International Management Institute, published in Geneva in June a couple of years ago, which gives an illustration of rationalisation in German mines. Between 1924 and 1927 the output per man rose by 60 per cent. The total coal output and sales rose by 10 per cent. and the number of men employed fell by 31 per cent.—from 6,942 men in 1924 to 4,815 men in 1927. Thus you have more work done by fewer workers, or unemployment resulting from greater efficiency in industry. Similarly, if I may take agriculture, owing to various causes, called rationalisation, the number of men forced out of agricultural employment in the United States has been enormous. Nevertheless, the supply of wheat is in excess of the effective demand, and wheat growers have been faced with the greatest slump of modern times. In this country we have been told that the decline in wheat and other arable cultivation can be offset by the development of dairy farming. That, in itself, means a vast decrease in the number of men per acre as arable is put under grass. It must inevitably mean a reduction in the number of men employed.
The output of agriculture in England and Wales in 1925 was £225,000,000 or £282 per person employed. Alter allowing for numerous changes, this was the same as in 1908, and yet there is a decline of workpeople on the land. It is an indication that wherever changes take place—and there have been enormous changes in agriculture—the inevitable effect is that there are fewer men employed. Indeed, if you compare the number of men in agriculture with the number of machines used, you will find some very illuminating figures. Between 1910 and 1921 the number of men and
boys over 15 years of age decreased by 55,000. Between 1908 and 1913 the number of employés, excluding farmers' sons, decreased by 71,000. As another illustration, between 1921 and 1924 the number of employés, including farmers' sons, decreased from 869,000 to 802,000, a decrease of 67,000. On the other hand, the number of agriculture engines in use in England and Wales rose from 17,331 in 1908 to 83,535 in 1925. The number of petrol or oil engines rose from 6,911 to 56,744.
In those circumstances, it is a matter for considerable alarm that when we talk about rationalisation, we give very little thought indeed to those people who are displaced as the result of the introduction of machinery. The employer does not consider it his business, though I know there are exceptions. I know of some industries where the employers provide schemes whereby men are considered for pensions and so on, but if it is a question of balancing costs or of reducing costs, there must be an introduction of machinery to save overhead charges, and with the provision of better and more efficient machines in the production of a commodity, the workers displaced as a result are given very little thought, if any at all. I may refer to the Civil Service and the Department with which I am familiar, the Post Office. There we see what we call the adjustments of staffs to traffic, which is nothing else than rationalisation going on day by day. Incidentally, I would say that the people who are clamouring for a reduction in the number of civil servants in the Post Office employ need not be alarmed. I question whether they could have reduced a single one more effectively than the administration is reducing them. Foot postmen have been replaced by a smaller number of motor cyclists and vans. The extent and variety of work in the Post Office have been increasing more rapidly than the size of the staff, and the output per head has risen just as it has in the mines and factories.
The machinery that is revolutionising banking is also being introduced into Government Departments, because if a Government, in its desire to be effective and efficient, introduces new machines it is praised for its efficiency, but it has not been given any credit up to now by the critics of those Departments that they
have, not perhaps dismissed people to any large extent, but have substantially stopped the number of people recruited, which is bound to have a very considerable off-setting effect upon employment generally in the country. In those circumstances, I would suggest that, on the question of rationalisation and all that it implies, the Government or, if you like, any portion of the Opposition are called upon to give close study to the subject, because it must relate in every particular to every walk of life and industry, whether the industry is sheltered or unsheltered. It really reflects the life blood of the industrial nation.
When my hon. Friend who preceded me referred to capital and labour and brains, I must enter a caveat against any suggestion that all the brains are on the side of those representing capital. On the contrary, I would suggest that industry is entitled to have consideration given to the brains of the workpeople, and the amount of energy that they put into industry, to a very much greater extent than appears to have been given up to the present. I should like to see the Motion much more definite in form than it is. I could support it in some measure as a principle, but I ask those who are going to be responsible for further study of the subject, and particularly our own Government Bench— the President of the Board of Trade, I know, is always studying these great questions—that, in any reconsideration of the proposals that may be made to industry, the manufacturers, and employers of all descriptions, must have brought home to them the necessity of recognising what has been described as the human factor in industry as well as the machine.

Mr. BENSON: Such remarks as I have to make on this subject I make with a great deal of diffidence, because what I have to say runs counter in a large measure to the general opinion as to the effect of rationalisation. With some of the remarks of the last speaker I very heartily agree. When he says rationalisation is no new thing, he is entirely correct. It is merely the name of rationalisation that is new. Rationalisation is at the moment in the limelight, and when any thing or person comes into the limelight there is a tendency first of all to magnify the importance of the
person or thing and, secondly, to blame it for everything that happens, even including the weather. At the present moment it is the custom to suggest that rationalisation is very largely responsible for the rising unemployment figures. The last speaker gave me the impression that he put a very large amount of blame upon rationalisation for that. Whether he intended it or not I do not know. One certainly at the first blush would get the impression that rationalisation is responsible for a very large amount. One reads of villages which have been turned entirely derelict owing to some great industrial amalgamation which has removed the whole of the production from one area of the country to another. One hears repeatedly of machines applied to industry which cut down the labour of a particular process to a fraction of what was employed before. I was told only a fortnight ago by a large employer in my constituency that he had put in a machine which enabled three girls to do the work of 23. One hears instances of this kind in every industry and in every department of industry. It is true that unemployment in individual cases is due to rationalisation and under the umbrella of the term rationalisation at present I include the whole question of tightening up and improving and developing industrial processes. It is true that there are innumerable men who a few years ago were engaged, say, in the chemical industry who are now out of work owing to the rationalisation of that industry by the changing of the districts where the processes are carried on. But although one may take individual unemployed men, or great groups of unemployed men, and say they are undoubtedly out of work because of some process of rationalisation, I think there is a distinct case to be made out against the suggestion that rationalisation has caused a bulk increase in unemployment.
I wish very diffidently, because the subject is one of vast complexity and certainly requires very careful consideration, to give one or two reasons which suggest. that rationalisation is not entirely, or to any great extent, responsible for unemployment in bulk. In the first place, rationalisation is not a new process. It has been going on under different names, not for 10 or 20 years, 'out ever since our industrial system com-
menced. One of the most important steps in the rationalisation of industry was the application of steam to industry. Nor is there any evidence that at present the process is being applied with increasing rapidity. Mr. Karl Schneider, the statistician to the Federal Reserve Bank of New York, calculated that for the last 50 years the United States productivity has increased with extraordinary stability. There has been a pretty steady increase of efficiency and industrial productivity of about 4 per cent. compound per annum. He also calculates that for the rest of the industrial world the increase in productivity has also been very steady round about 3 per cent. compound. The League of Nations, in a Memorandum on Industry and Trade, made a calculation which suggests that between 1923 and 1927 world productivity went up roughly by the same amount, about 3 per cent. per annum compound.
Apparently there has been no very great extension of this process of rationalisation during the past few years. Sir Henry Strakosch says very definitely that the process of industrial development was just as rapid and just as extensive in the first 15 years of the present century as it has been during the past 10 years, approximately the same amount, about 3 per cent. per annum. It may interest my hon. Friend the Member for Crewe (Mr. Bowen) to know that some years ago I was talking to the Postmaster at Manchester and—it is rather a peculiar coincidence—that he informed me that he was under the impression that the Manchester Post Office, at any rate, was improving its efficiency steadily every year, and the figure he put down was 3 per cent. per annum. So that whatever hon. Gentlemen opposite may say or think, the Post Office is holding its own in increasing its efficiency with the industrialists who claim for themselves the monopoly of business efficiency. If it is true that the increase of industrial efficiency has not greatly accelerated during the past 10 years, and if there has been a fairly steady increase in efficiency over the past 50 years, as Mr. Schneider suggests, obviously., at any rate, until the War came, there had been no great increase in unemployment owing to that efficiency, for unemployment figures remained stable
with their usual fluctuations up and down during the whole of the last 50 years. Furthermore, there were far more people engaged in industry at the end of 50 years than before industrial efficiency had increased. But it had not thrown people out of employment.
Let us take the last 10 years. Is there any evidence that unemployment has been caused by the growth of efficiency'? During the past 10 years, from 1920 to 1929, approximately 10 years, assuming that there has been a growth of 3 per cent. in efficiency compound, it means we shall get 30 or 40 per cent. at the very least increased efficiency in our industrial system. During that period there was no serious increase in unemployment. The figures moved up and down seasonally and for short periods, but, as far as this country was concerned, there was no steady increase of unemployment until the present industrial world-wide causes came. There is at the moment a tendency to blame the whole of our present unemployment, our 2,000,000 unemployed to rationalisation. Obviously, the increase in unemployment which has come suddenly and overwhelmingly is due to world-wide causes which are temporary, and which came rapidly. It is not due to the steady growth of industrial efficiency which has been proceeding during the past 10 years, aye, and during the past 50 years. If we are going to take a balanced view of rationalisation, we must isolate and we must take a broad statistical view of the subject, and realise, as I have- tried to show, that there is a very strong case to be made out to suggest that rationalisation in itself does not cause the bulk increase in unemployment. I am fully aware that it must cause changes of employment. It must cause dislocation in the labour market. Labour is thrown out here and there, and I am speaking I know for the whole of the Labour party when I say that there is no question about it as far as we are concerned that labour must -be insulated against those shocks of change of employment.
I would furthermore suggest that this change in employment is in itself desirable. Obviously, as our productivity increases, our requirements vary to a very large extent. We require, not a steady increase in the production of the same type of article. We require some articles
to remain more or less stable and stationary in the market, and the production of other and newer ones to be developed. At the present moment the poverty of the bulk of the people of this country does not consist primarily of the shortage of the bare necessities of life. It consists very largely in what one might term the secondary necessities of life which go to make life interesting, happy and full. If we are going simply and solely to increase our products of the same type of articles, it is going to get us nowhere. What we want is to enable industrial efficiency to employ less and less labour on the basic necessities in order that more and more labour may be employed on luxuries which are not necessary for the few but for all.
The human element has to be considered. I hold that rationalisation is really a blessing. In fact I am certain that part of our trouble is due to the fact that other nations have rationalised somewhat more than we have. I have here a quotation from the Balfour Committee:
It is abundantly clear that the first step towards putting British industry in a position to compete successfully in the overseas market is to subject their organisation and equipment to a thorough process of reconditioning.
In other words it is not rationalisation which has caused unemployment in this country, but the fact that other nations have been rationalising more rapidly than we have. It is essential in the interests of the nation, in the interests of trade and in the interests of all concerned that rationalisation should be pushed on as rapidly as possible. If the Resolution could be acted upon one factor, the hostility of working people towards rationalisation, would be removed. Quite apart from questions of humanity or questions of common decency I suggest to hon. Members opposite that upon purely business grounds it is desirable that the workers should not be allowed to suffer even temporarily by industrial reorganisation and that every hindrance and every block in the way of efficient reorganisation of industry should be removed and that if we do so we shall he rewarded handsomely, over and over again.

Captain BOURNE: In listening to the interesting speech of the hon. Member for Chesterfield (Mr. Benson), I gathered
that, on the whole, he is in favour of rationalisation, and, further, that he regards the argument that rationalisation causes permanent unemployment as distinct from temporary unemployment, as an argument that has no more basis than had the argument used against the introduction of machinery something like 100 years ago. One of the difficulties in discussing rationalisation is that it is a word of somewhat vague meaning. We have discussed the advantages of horizontal trusts and vertical trusts. Exactly what is meant by the word "rationalisation," a hideous word, which came from Germany, it is rather difficult to say. If hon. Members mean that we want to bring our machinery up to the most modern pitch, I do not think that there is anyone who would disagree, but I would suggest to the House that if you mean by rationalisation that you are going to organise industry on a very large scale and to have that industry interlocked, you are running a very considerable peril. We passed in the last Session a Bill to rationalise the coal industry. I do not want to enter into the merits of that Bill, but I gather from the Press that it is going to put men out of work in certain places. It is also going to do something much more dangerous. It means that we are going to have a large group of pits, so far as I can understand, under a more or less, I will not say joint control, but unified control. Should something occur in the world's history, a greater use of electricity for instance, or should someone discover a new form of storage battery it is going to be far more difficult for that unified industry to compete against new conditions, because not only have you got a vast amount of capital sunk in this combination, but you will have, instead of the gradual dislocation by the closing of one pit after another, the whole of a big group of pits thrown out of work simultaneously. That is one of the things in discussing rationalisation from any point of view that we have to hear in mind.
Every one of us in this House and every person in the country desires that we should have the most efficient industry and one that will give, not only good wages to the workmen, but reasonable security of employment, because that is equally important. I have been wondering in the discussions to which I have
listened on this subject whether necessarily amalgamating all the different branches of industry is not putting large sections of our population in very great peril of being thrown out of work when some change in world circumstances, changes which we cannot possibly control, occurs. Let us take coal as an instance. Twenty years ago there was no competition with coal. To-day, there is competition from heavy oils, light oils, and electricity in this country and in different parts of the world, so that coal has no longer its old monopoly. Putting whole masses of workmen and whole masses of capital into an industry when some change in the fashions of the world or the introduction of some new invention in other countries, over which we have no control and cannot alter, may bring the whole of that industry suddenly to a termination and put all those people out of a job and that machinery without any possibility of being used, is a peril which we must not face lightly.
10.0 p.m.
There is one further thing in regard to rationalisation that needs to be watched. I had a little difficulty in following the line of argument of the hon. Member for Chesterfield, but I gathered that he wanted rather less labour put into our basic industries and rather more labour into what he regarded as the luxury trades. I am not quite certain whether in that he wanted mass production. I have seen mass production in one factory which is close to my constituency, and it struck me that mass production as I saw it done was a marvellous performance, but it was the most soul killing thing for a man that I have ever seen. To expect any human being to go through life turning out nut 132, unless you either pay him highly so that he can get necessary relaxation elsewhere out of his working hours, is really enough to cripple enthusiasm and to destroy any man's interest in his work. I am old fashioned enough to believe that a man should be interested in his work and take a pride in his job, but to think that any human being can be interested in his job in taking up a spanner and doing it so many times a minute is something that I cannot understand.
If you have mass production to such an extent that you have, say, cutlery in
five different sets that anybody can buy, and you have nothing else, and if you have dinner services of very limited range and pattern turned out by the million, you will do a very great deal to destroy the artistic sense of the nation. We talk and read a great deal about the merry England of our ancestors. What was it that made that spirit of merriment? It was due to the fact that the people in those days were not limited to a narrow range of employment or a narrow range of choice. They had a choice that was expressed in colour, and they could gratify it. They were not bound by what somebody else thought were the proper canons of taste. That is a matter which we need to watch as a nation. We do not want to force people to have a standard pattern of everything in life. If we do that, we shall make life mechanical, even more mechanical than it is to-day. The nation really depends upon its soul, and if it lives for mechanical things, things turned out by the million, one exactly like the other, the soul of the nation will be like the machine that turns these things out; it will become mechanical, and I do not think that any great country can exist on a soul like that.

Mr. MILLS: The hon. and gallant Member for Oxford (Captain Bourne) has made to this debate a contribution which would have been very valuable if it had formed part of yesterday's debate. I can only wish that some of the 20 or 30 young Members of Parliament who interrupted without any attempt at decorum or restraint when the Prime Minister was making his speech, could have sat through this debate to-day and have listened to the varying contributions that have been made by different speakers on the subject of rationalisation. The terms of the Motion are so drawn that it does not begin in a partisan spirit and it need not necessarily end in the division lobby. What it does is to make hon. Members of all parties think over and discuss the varying aspects of a very great change. The hon. Member for Crewe (Mr. Bowen) was right when he said that rationalisation to us in the trade union and labour movement is no new thing. I remember the dock workers discussing rationalisation a few years ago as a result of the Melchett-Turner conferences and I re-
member a dock labourer describing it as a new name for an old disease.
In my association with the engineering trade we have been face to face with the rationalisation of industry in the sense of the machine age. The hon. and gallant Member for Oxford having walked into it from a cultured life and cultured atmosphere, recoils at the idea of a man becoming an automaton day after day, just waiting for the next Morris car to come his way. In the engineering field in Coventry, Sheffield, Leicester, Middlesbrough, there has been such a development that men who 20 years ago were producing machines are now watching their daughters and their granddaughters turning out 50 times the amount they used to turn out, whilst they themselves are looking for a job and are being insulted by a rationalised Press for drawing something for which they have paid in unemployment insurance contributions. The terms of the Motion draw attention to the fact that such schemes to be effective should provide for a reduction of inflated capital values. I wonder how many of the Tory Members of Parliament who barked at the Prime Minister yesterday at Question Time have read the volume on the Survey of Industries, Parts 3 and 4, of the Balfour Committee on Industry and Trade. If they had they would know what is said about values and the overcapitalisation of the cotton industry by a committee of experts. It says:
In connection with the economic condition of the spinning section of the industry, it is necessary to refer to the effect of the re-capitalisation or financial reconstruction of numerous mills which took place during the post-War boom of 1919–20. At that time large profits were being made in the industry, the general level of prices was far above either the pre-War or the present level, and on the basis of replacement costs the mills were worth several times their original capital cost. This state of affairs prompted many companies to increase their capital by distributing bonus shares, while company promoters seized the opportunity to buy up mills and float them upon the public as new companies with a very much increased capitalisation. … The subsequent slump in the cotton industry left these recapitalised and reconstructed companies in a much worse position from the dividend paying point of view than was the case with the companies which had retained their original capitalisation.
Hon. Members from Lancashire know from actual experience what I myself
have seen from sporadic visits to that distressed area. In four years 130 of these reconstructed companies never paid one penny in dividend, but the most thrifty of industrial working classes in Great Britain, the Lancashire operatives, when they wanted jobs in these reconstructed companies were offered a job if they put something into the mill on loan. In the days of depression some of these directors cleared out and sold their shares, and when the poor devils of operatives tried to cut their losses they were faced with the threat of discharge if they attempted to do so. They had to work on until the mill closed and had to see their savings slowly drained away. In that same period, while no dividends were paid for four years, they made calls on these poor devils of operatives, on their life savings, of over £11,000,000.
I am glad to say that in the Division I represent, the Dartford Division, the engineering trade has so far responded to the need for reconsidering the financial aspect. They did not pursue the lunatic policy of the cotton trade in Lancashire. Messrs. Vickers, who have works all over the Dartford Division of Bent, and in many other parts of Great Britain, wrote down their book assets by something like £12,000,000 in 1925, and in 1927 Armstrong Whitworths wrote down their book assets by £11,000,000. We who represent the working classes ask that in any consideration of these things the point of view of the workers should be taken into consideration. For my sins I have known what it is to tramp the country looking for work before the Employment Exchanges were established and when the 10s. per week benefit of the trade union was the only thing an unemployed man had. We resent strongly the insinuation, made by people who ought to know better, that we should in some way or other cut down the allowance for men in the industrial army who are not wanted. This nation trains men to become physically fit to die, in the Army, Navy and Air Force; they are well fed, well clothed, and well housed, and in some cases there is a pension for them at the end of their days. As regards the police force, we are only too glad if nothing happens to need their services. The municipalities provide fire brigades, and we are only too glad to give them a
week's holiday with pay, with their equipment, food and wages. Nobody cavils at this.
In the industrial army it is the capitalist who gives or withholds employment, and we consider that in this question of rationalisation you should consider the point of view of the worker. We flatly deny that the limits of necessity have been even half-way reached in this world of our. Look around, in India, Russia, Poland, Turkey, and you will find that in terms of rebuilding bridges and factories, clearing land, in terms of relaying railway lines and locomotives, the world to-day can do with the labour of hundreds of thousands of skilled engineers. If we could co-relate human energy to human need we need not be discussing unemployment in terms of millions. We are a minority Government, operating temporarily, with little political power, which has no relation whatever to economic power. I hope that the tone of this debate, which has been free from rancour and the scoring of petty points, will be maintained in subsequent debates, so that we may reach a more or loss common level of agreement and search into the causes of the various troubles that beset us.

The PRESIDENT of the BOARD of TRADE (Mr. William Graham): The Rouse will agree with one remark which was made by the hon. and gallant Member for Ayr Burghs (Lieut.-Colonel Moore), when he expressed regret that on an occasion when my hon. Friends had used private members' time to raise a very important subject, there was such a small attendance of Members. Not a single one of us present would suggest that anyone should stay to hear our speeches, but the hon. and gallant Member struck the right note when he said that this was a matter of great public importance affecting the industry and the commerce of this country and the lives of many millions of people. The subject is certainly of even greater importance under post-War conditions. It is my duty to summarise one or two points in the debate and to give the House certain information. I should like to pay a tribute to my hon. Friends on this side of the House, and also to hon. Members opposite, for the temper and the spirit in which the subject has
been discussed. There are really three parts of the Motion—one which indicates that the step to which we give the rather ugly name "rationalisation" is necessary to the efficiency and progress of our industry; the second that rationalisation should proceed in terms of sound financial practice; and the third that in the process there should be provision for the workers who are displaced until they can again be absorbed in remunerative occupation.
Taking the three points in order, it will not be disputed that this process is very old. But new terms have been applied to it, and particularly since the War period. As the Balfour Committee pointed out, we have seen a remarkable growth of manufacture in different parts of the world—in the great markets in the Far East, in textiles, within our own Empire and elsewhere—and there is not the slightest doubt that these parts of the Commonwealth and these foreign countries are determined to build up their industries in such a way as to present a new state of affairs for the manufacturer in Great Britain. Then, of course, there are the great changes which have come about as a result of the burdens flowing from the War, the very heavy loan which has been saddled upon this country, and the manner in which, in France and in Germany, the liabilities resting upon industry have to a considerable extent disappeared.
Without proceeding further by way of summary of the changed post-War conditions, we must realise that this process is not only old but necessary and in some way requires to be accelerated if this country is to recover and if remunerative employment is to be provided for a substantial portion of the 2,000,000 people who are out. of work—to which section this part of the question immediately applies. Of course, in pre-War times we used to hear a great deal about cartels and syndicates and trusts. We heard also a great deal about simplification of methods and standardisation—in short rationalisation. It is nothing new that we are discussing. It is rather the post-War phase of an old problem, but, at the present time, we see the problem in an acute form in the great industries in the State. For example, in coal-mining it is assumed that there may not be again remunerative employment for, perhaps,
200,000 men who were formerly engaged in the mines unless there is, in connection with some process like hydrogenation, or in some other field such as the extraction of oil from coal, some new development which may give to this industry a new lease of life and enable it to re-absorb those men—even with progressive amalgamations the industry and the improvement of its internal efficiency by the use of coal-cutting machinery and the rest.
There is very much the same problem in many of the aspects of the Lancashire cotton trade. As I indicated in this House two or three days ago, there are four or five sections, beginning with the raw material and going through the spinning, weaving and finishing trades to the merchanting branch. In all these there is a certain amount of organisation. There is a considerable degree of organisation in the three sections of the finishing trades, covering perhaps 60 per cent. of the field in each section, always with a minority but nevertheless including some form of price regulation. There is a certain fusion between parts of the merchanting and parts of the finishing trades, and there is a certain fusion within narrow limits in the spinning and weaving sections but, broadly speaking, there is a segregation of the four or five sections in that industry, and the great problem confronting both the Government and the Lancashire cotton trade to-day is the form which the new organisation, or what we call rationalisation, is to take, in order that the markets at home and abroad may be recovered, and in order to provide for as many as we can possibly cover of the 250,000 people out of work in Lancashire representing one-half of Lancashire's operative population. So I might continue round many other industries in the State. There is the question of regional organisation in the iron and steel trade and the extent to which further organisation is possible in an industry already highly organised. There is a similar problem in the woollen trade in regard to which we are in great difficulties at the present time, in agriculture and, indeed, in almost every field that one could mention. But underlying all this process which is, of course, inevitable, there is the desire to put the commodity on the market on such terms as will recover our markets at home and
abroad remembering the changed conditions.
If that is a fair summary of the situation, the choice which confronts us is comparatively simple. It means that we have either to approach a solution by way of ordered progress, seeking so far as we can to direct this reorganisation, or to allow the reorganisation to take place by the ordinary events of industry itself, which events will be very largely those of bankruptcy and the exclusion of the weaker elements in existing conditions, with very great loss and probably even more unemployment and distress than an ordered reorganisation, as I should like to describe it, would involve. So the Government, from the first hour that we took office, has bent its mind to the position of the leading; industries in the country and has been actively engaged on the coal industry and closely associated with cotton, iron arid steel, and many other industries. That is being done to some extent in the field of compulsion under the Coal Mines Act, but in the rest of the field very largely in terms of voluntary effort, and the underlying principle of that point I described to the House quite briefly, but I trust sufficiently, in the debate on Monday afternoon.
I should like to say also to hon. Friends, particularly on this side, that all that process is not inconsistent with the view that they and I hold regarding the future of our industrial system. Strongly as we believe in the extension of ownership to the people of this country, we have always held that that must be in terms of efficiency in industry, that forces which we believe to be unnecessary should be eliminated, and that producer and consumer should be brought together, the producer in fair and generous terms as to the contribution that he makes and the consumer protected in the standard and quality of the article and the price at which it is offered for his consumption or use.
In the second place, hon. Members have raised the question of the financial terms or methods under which this policy must proceed, and my two hon. Friends who put the Motion on the Paper directed attention to the danger of inflated values in any form of industrial reorganisation. We have always been aware that there
has been in recent times probably a good deal of purely paper amalgamation, that is to say, the fusion of a large number of industrial undertakings with a capitalisation which bore very little relation to the strict assets involved and, I am bound to add, very often little relation to the capacity for production. To some extent that accounts for the aggravation of unemployment in existing conditions. We remember the post-War boom period in Lancashire and the grossly inflated figures at which a considerable number of those factories were recapitalised. Disaster was apparent to every student of the problem, and, although I am not going to suggest that it is more than a part of the field of difficulty in Lancashire, there is not the least doubt that the adverse influence has extended very far beyond the factories which were immediately involved. So to-day it is idle to speak in terms of industrial reorganisation unless we mean by that that the new capital is approaching the assets and the earning capacity of the changed structure.
There is a good deal, I am afraid, of public and other misunderstanding regarding the policy of the banking authorities in this country. That bears to some extent, though indirectly, on some of the points put to me by the hon and gallant Member for Ayr Burghs. On the general point, the Bankers' Industrial Development Company and the Securities Management Trust have stated that for all sound schemes of industrial reorganisation the necessary capital will be forthcoming; but they have also stated quite definitely—and this goes to the root of a considerable part of the Lancashire cotton industry— that they are not prepared to find money to replace capital which should be regarded as irretrievably lost. Nobody could stand at this Box and withhold sympathy from the very large numbers of people—very often comparatively poor people—who have sunk their resources in these undertakings, hut it is equally plain to every one of us that if new money is provided merely to make good losses which have been incurred, that money is diverted from the real task of reorganisation, which is to equip these establishments and to make certain that they can be conducted on something resembling sound and remunerative terms.
So there is to-day a certain conflict of opinion between the people who are arguing that there should be resources for the replacement or for part satisfaction of what has been lost, and those who hold the principle that the money should only be provided for a reconstituted and reorganised industry capable of being conducted on economic lines.
The hon. and gallant Member raised what was a narrower but still important point, and asked, particularly in the case of shipbuilding, whether there was not some kind of provision that the Government could make to keep shipbuilding yards running, to cover, so to speak, for the time being, the personnel until again ships were constructed or orders were placed for ships such as would enable them to come back to the ordinary processes of industry. Of course, the Government in the past have done a certain amount in that field, hut as I understand it, what the hon. and gallant Member suggests is really some form of temporary accommodation. That raises a very large and important issue. In that field, the National Shipbuilders Securities Trust has surveyed practically the whole of the shipbuilding industry in this country. It has bought up a considerable number of yards; I do not know on what terms, but I imagine on comparatively low terms in many cases. On being satisfied that these yards cannot be run on economic lines, they have dismantled and closed them down, the general object being to concentrate the future demand for shipbuilding upon the smaller number of efficient units in shipyard construction. With that general principle, I do not think that there can be any particular quarrel, but there is the problem of the immediate displacement of men, and how those men are to be again absorbed either in the shipping industry or some other industry to which they can turn.

Mr. KIRKWOOD: What about the yards that are being closed and that are highly efficient? We have a case just now of a highly efficient yard at Old Kirkpatrick which is going to be demolished.

Mr. GRAHAM: I cannot pronounce officially to-night on the conditions in that case; but, taking the position as it is stated by my hon. Friend, I have not the
least doubt that there are certain efficient yards which in a newly-laid-out industry redistributed on the lines I have just described might have to be closed. That does happen. I have not the least doubt that that may be true of certain coal mines under the scheme for the amalgamation of collieries when the amalgamation commissioners get to work. It merely bears out the familiar truth that in the process of trying to lay down a regional scheme, whether for coal mining, iron and steel or shipbuilding, certain efficient concerns here and there will be closed along with less efficient ones, because of the desirability of concentrating likely future production in certain parts of the country or in certain groups of yards. The question which the hon. Member raised was whether the Government can make any contribution, temporary or otherwise, to that state of affairs, which, of course, would be a contribution apart from anything which is done by the National Shipbuilders Securities Trust. I am not in a position to-night to promise any Government money for that purpose, for a reason which I think will be obvious to hon. Members. If by any chance the promise of compensation or temporary funds were held out for this industry, the importance of which no one denies, similar help could not be withheld from a very large number of other industries, and that would speedily involve the State in an enormous outlay, the value of which as an investment would be a highly debatable proposition.
Why do I make that statement? As the hon. and gallant Member himself pointed out, there has been a great change in post-War conditions in shipbuilding construction. There is the larger size of the tonnage of ships, the reduced demand for ships of war, the doubt as to the part which the mercantile marine of this country is to play in the aggregate of world tonnage. It is a matter of the very greatest debate as to what would happen to any such sum, the provision of which could only be justified if there were a reasonable certainty that it was a temporary accommodation, and that in any case it was applied to those yards which were substantially efficient.

Lieut.-Colonel MOORE: My suggestion was that the two proposals which I made should be taken together, that is, that
by the scrapping of mercantile marine ships of 20 years and of warships of 15 years you would be insuring that the industry would come back; and, therefore, the advance which the Government might make towards the efficient yards would be justified.

Mr. GRAHAM: I was just approaching the very point which the hon. and gallant Member has mentioned. Statistics show a very large surplus of world tonnage and it is common knowledge that freights have sunk to a very low point, and there is, accordingly, very great doubt as to the remunerative use of a great deal of new shipping construction. But passing to the other point, that of the obsolete tonnage, very strong representations have been made by trade union colleagues and by a certain section of the industry that that problem should be reviewed, and that we should find out whether, by scrapping the tonnage in the different classes at earlier dates, a. contribution could be made to the relief of the undeniable distress in the shipyards. I am happy to be able to inform the House that so soon as we had received these suggestions and discussed them I appointed a representative committee at the Board of Trade, covering both sides of the problem—the industry and the trade unions—for the express purpose of reviewing the question of scrapping obsolete tonnage. Even now they are engaged on that task, and I trust and, indeed, believe that it will not be one of the interminable and prolonged inquiries which shatter the hopes of bon. Members, but will be conducted expeditiously and on businesslike lines. I hope that we shall have the report at an early date, and then I think my hon. and gallant Friend opposite (Lieut.-Colonel Moore) will see that at least that part of his ease is met. I will indicate the result to the House as soon as it is in my possession.
All these questions relate to the method of meeting a temporary situation. It is on my third point that, with a further few minutes, I will conclude this reply. It is, of course, a matter of intense human interest. I have already alluded to the displacement in the coal mines of Great Britain; to the fact that Lancashire cotton is probably carrying too much personnel; to the fact that in the iron and steel industry, on a reason
able re-organisation, the numbers to be employed in the future, even with greatly extended facilities, may well be less than they are to-day., Much the same may be true of other industries in this State. How is that problem to be faced? In substance it is the problem of the time-lag between the immediate displacement in our organisation for the purpose of making the industry more efficient, recovering its home and export trade, and the date at which those men will be absorbed in whole or in part in the reconstituted industry, regaining those markets and presumably getting in some cases, as I hope, an even larger volume of business than those industries had in the past, and certainly larger than they enjoy to-day. In a time of normal business activity when things are even moderately prosperous there is over a large part of the industries and commerce of this country not too long a time-lag, but a time-lag exists. That time-lag tends to be extended as we sink into the depression, or, as I prefer to put it, as we do not emerge from the depression, a phrase with a slightly more optimistic note.
That is the immediate problem we have to face to meet the situation. It is met to some extent at the present time, but it is only met, so far as our industries are concerned, where you have a public utility and some form of State co-operation, or where the industry is operating in terms of an Act of Parliament which means regulation by the State. That is particularly true of the great national and local government enterprises, where there is provision, mostly at national or local expense, for compensation for displaced employes, either by way of a lump sum or gratuity, or a pension for the remainder of their days. That has found an extension under the Electricity Acts, and as applied to gas companies and to certain large industries which are very nearly in trust, or in quasi-monopoly form, at the present time. Plainly, those industries are able to undertake that task of providing for displacement, because they have something in the nature of a monopoly; they are not really in fierce competition, they are working under regulation, and, in so far as they are upon public utility terms, they have the means of passing on
to the consumer some part of the charge which they have to carry under this head.
I should like to see that principle very considerably extended, and I entirely agree with hon. Friends on this side of the House, and, indeed, elsewhere, who have said that in these and other industries the workers and the trade unions should be taken into regular consultation in problems of that kind. In fact, they are taken into consultation in a great many problems in, for example, the gas industry at the present time, and only recently I received a representative deputation from both sides of the industry, including those engaged on the side of manufacture and my hon. Friends the Members for West Nottingham (Mr. Hayday) and for West Ham (Mr. W. Thorne), as representing the employes, making a united appeal to the Government on matters which were of fundamental importance to the progress of that great public utility of gas manufacture and distribution. Therefore, I give the warmest commendation, if I may, to the extension of that principle, and these are particular industries in which it should be applied under existing conditions.

Mr. HERBERT GIBSON: Would the right. hon. Gentleman explain what policy the Government have in connection with women who are being displaced, particularly in the cotton industry

Mr. GRAHAM: I was about to approach, on the second heading, the question of the displacement of women, and the different state of affairs which is found when we pass to those industries which are now in difficulty and are the subject of reorganisation schemes. I do not think I can give a better illustration than by referring to the problem presented by an Amendment promoted on this side of the House during our discussion of the Coal Mines Bill. There, in the schemes for regulated output at the pithead and the fixing of minimum prices, hon. Friends of mine said that there should be some scheme of compensation for the miners displaced; but, while I, personally, had the warmest sympathy with that Amendment, I was not able to incorporate it in the Bill for a very sufficient reason, more particularly as applied to coal, and it would work out in very much the same way in other industries as well.
The effect of that proposal in the coal industry would have been to add an obligation to a trade which was, beyond all dispute, in deep depression, which had lost a great deal of its home market, and was struggling terribly in its export trade; and, as it would have worked out, it would have diminished the proceeds available, which, in turn, regulate the remuneration of the miners. Consequently, in so far as the cost was borne by the industry, and there was not recourse against consumers, the only effect at that stage would have been to diminish the amount available on the ascertainment for the miners in the 21 wages ascertainment districts in the country; and, since all those districts were already on the minimum, or practically on the minimum, I had, with very great regret, to reject that proposal so far as the Coal Mines Bill was concerned. That is the principle running through other depressed industries, and, accordingly, it becomes a question whether you can put that charge upon industries in that position unless you give them a pretty complete form of regulation, unless they have some guarantee of price and the rest, and unless they are so far in a position of monopoly. Even under the Coal Mines Act the coal industry will not be in a position of monopoly, at all events as far as the export trade is concerned.

Mr. KIRKWOOD: Why compensate the owners and not the miners?

Mr. GRAHAM: Not even the mine-owner is compensated. As regards the home market there is no such guarantee, and the amount of export trade, as such, has such a close bearing on the matter that it becomes a big factor. That is the kind of difficulty we have to face. I should be misleading the House if I said that in the reorganisation of these depressed industries there was any immediate prospect of incorporating schemes of this kind covering displacement.

Mr. BROOKE: Will the right hon. Gentleman say if in the case of a shipyard which is being closed, where the new trust has bought out the yard, there is to be compensation?

Mr. GRAHAM: It all depends on the terms on which the yard is being bought out. I have no knowledge of these terms, but if the practice is being applied there which is being applied in other sections
of our industry, then we may assume that something very much less than the amount of capital sunk in the undertaking by the investor is being repaid at present. That is a large scale problem in Lancashire, and the extinction of existing interests can only be in terms of literally disastrous losses to the investors. There is no other course, because any other course would involve the recapitalisation of the industry, which is something which the industry cannot carry. The loss which affects the investor and those who hold the capital must be faced. It corresponds to the losses which fall, unfortunately, upon the great mass of working people at the same time, in so far as they have been investors, in the loss of occupation.
I should like to say a word about the other field. There is at the moment the provision of Unemployment Insurance. I am not going to suggest that is the way in which cover of this kind should be provided, but at the moment in the large scale of unemployment it is the compensation which the State offers through it contribution for the loss of employment, which may be due not only to schemes of reorganisation but to the ordinary loss of trade, or whatever cause absence of work may be due. It is very far from being the end in the solution of a difficulty of this kind. If we assume that even in a recovering trade that time-lag between displacement and reabsorption will be considerable, then we have all to ask ourselves whether there cannot be some more comprehensive form of insurance to cover all risks to which the great masses of our people are exposed. It does not fall within my department to make a pronouncement on such a very large and controversial field, but if I may speak personally for a moment, I have always had a plain, and I hope, clear view of this problem of insurance. The central principle of insurance is that it must be comprehensive as to the number of people who are included, as only on that basis can you provide any kind of fair or reasonable payment whilst displacement continues.
The Government's views on the insurance scheme of this country have already been indicated. Insurance may be designed to cover sickness and displacement, workers' compensation, industrial displacement of this kind, old age, and, in short, all the vicissitudes
and all the risks to which millions of people are exposed. We are in a time of very great financial difficulty. The outcome of that investigation I cannot forecast, but I can say to the House that we are alive to the importance of the problem and that, while there is immediate cover in Unemployment Insurance for payment for this displacement on industrial reorganisation, it may be that that view will suggest other better and wider methods of treating the problem, and it will have to take into account the extent to which those industries themselves, more particularly monopoly or quasi-monopoly industries, can contribute. We have discussed tonight a great and important question of re-organisation. I believe it to be necessary to the industrial recovery of the country, and I should like to appeal to Members in all parts of the House for a fair and sympathetic consideration of this matter, believing, as I do, that very soon we shall begin to see an upward movement and, unless a contribution is made, Great Britain may not participate to the full extent in world economic recovery.

Lieut.-Colonel MOORE: Would it be possible for the Government to act in the capacity that I suggested as a liaison
officer? It would be far better to give these men employment than doles.

Mr. GRAHAM: That is exactly what we are doing over a wide range of industries. I did not refer to it as time was passing rapidly, but I shall be delighted to indicate personally to the hon. and gallant Gentleman or to any Member of the House the scope of our work.

Question put, and agreed to.

Resolved,
That this House, recognising the need for increased efficiency in British industries with a view to securing an improvement in trade and the conditions of labour, welcomes schemes of rationalisation to this end, hut is of opinion that such schemes to be effective should provide for the reduction of inflated capital values, and to be just should provide that compensation for loss of employment shall include work-people as well as directors.

The remaining Orders were read, and postponed.

ADJOURNMENT.

Resolved, "That this House do now adjourn."—[Mr. Charles Edwards.]

Adjourned accordingly at One Minute before Eleven o'Clock.